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HRA Agenda 04-11-2007 13. Committee Reports: Marketing Fiber Optics . AGENDA - ANNUAL MEETING MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, April 11, 2007 - 6:00 p.m. Bridge Room - Community Center Commissioners: Chair Brad Barger, Vice Chair Steve Andrews, Donin Lahr, Dan Frie, and Bill Fair. Council Liaison: Wayne Mayer. Staff: Rick Wolfsteller, Ollie Koropchak, and Angela Shumann. 1. Call to Order. 2. Consideration to approve the February 7,2007 BRA minutes. 3. Consideration of adding or removing items from the agenda. 4. Consent Agenda. A. Consideration to approve the Certificate of Completion for SL Real Estate Holdings, LLC dba Karlsburger Foods, Inc. 4.5 Consideration of a presentation on the Cedar Street Garden Center property by Zach Adams, Wright- Sherburne Realty. 5. Consideration to approve a resolution adopting a modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. I and establishing TIF District No. 1-38 therein and adopting a TIF Plan therefor. Applicant: Walker In-Store. . 6. Public Hearing on the Business Subsidy Agreement and Land Sale. A. Consideration to adopt a resolution approving the Purchase and Redevelopment Contract between the BRA and WRE, LLC including the business subsidy agreement and land sale. B. Consideration to approve a resolution authorizing Interfund Loan for Advance of certain costs in connection with TIF District No. 1-38. 7. Consideration to approve the election of HRA officers and approve appointment of commissioners to sub- committees. 8. Consideration to review and accept the year-end financial reports for the BRA General Fund and TIF Fund as prepared by BRA Treasurer W olfsleller and Senior Accountant Paula Masley. 9. Consideration to review for amending the BRA Business Subsidy Criteria and BRA Bylaws for possible amendment and to call for a public hearing if determined. 10. Consideration of an update on the Comp Plan (downtown) and discuss Froslie purchase offer. II. Consideration to authorize payment of BRA bills. 12. Consideration of BRA Executive Report. . 14. Next regular BRA meeting - Wednesday, May 2,2007. 15. Adjournment. . . . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday, February 7, 2007 - 6:00 p.m. Bridge Room - Community Center Commissioners Present: Chair Brad Barger, Dan Frie, and Bill Fair. Commissioners Absent:: Vice Chair Steve Andrews and Darrin Lahr. Council Liaison Absent: Wayne Mayer. Staff Present: Executive Director Ollie Koropchak. 1. Call to Order. Chair Barger called the HRA meeting to order at 6:07 p.m. declaring a quorum. 2. Consideration to approve the December 6. 2006 HRA minutes. COMMISSIONER FAIR MADE A MOTION TO APPROVE THE DECEMBER 6, 2006 HRA MINUTES. SECONDED BY COMMISSIONER FRIE AND WITH NO CORRECTIONS OR ADDITIONS, THE HRA MINUTES WERE APPROVED AS WRITTEN. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. 3. Consideration of adding or removing items from the agenda. Koropchak requested two items be added to the agenda: SA. Resolution requesting the City Council call for a public hearing on the proposed TlF Plan for TlF District No. 1-38. 5B. Resolution calling for a public hearing on the proposed awarding of a business subsidy to WRE, LLC. 4. Tabled - Consideration to authorize pavrnent of the exercised Contract of Deed between the City and the Otter Creek GrouP. LLC in the amount of$1.269.900.33. This item was tabled at the December HRA meeting at the advise ofHRA Attorney Bubul until such time the HRA General Fund received revenues for the A VR site traded by the City. Given the City Finance Director has authorized and transferred $1,385,208 from the County Road 18/1-94 Project 2004-01C into the HRA General Fund for the l2-acre developable site given to A VR, the HRA made the following motion: COMMISSIONER FAIR MADE A MOTION TO RA TlFY PAYMENT OF THE EXERCISED CONTRACT FOR DEED BETWEEN THE CITY AND OTTER CREEK GROUP, LLC IN THE AMOUNT OF $1,269,900.33 FOR APPROXIMATELY 53 ACRES OF LAND ACQUIRED ON AUGUST 23, 2006. COMMISSIONER FRIE SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE AND 1 . HRA Minutes - 02/07/07 BARGER. NAYS: NONE. Fair asked where or if the city reserve funds were used to pay for the 12-acre A VR site? That would be a question for the Finance Director. 5. Consideration to approve entering into the Preliminary Development Agreement between the HRA and Walker In-Store. 2 The HRA was asked to approve entering into the Preliminary Development Agreement dated January 31,2007 between the HRA and Walker In-Store. The Agreement has been executed by the developer and the $10,000 deposit submitted. Koropchak informed the commissioners that Walker accepted the HRA offer of $43,560, no assessments and no trunk fees for the 5.82 acre site (Lot 2, Block 1, Otter Creek Crossing 3m Addition). The parcel consists of 4.27 acres of ponding and utility easements and 1.55 developable acres. COMMISSIONER FAIR MADE A MOTION TO APPROVE ENTERING INTO THE PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE HRA AND WALKER IN-STORE. SECONDED BY COMMISSIONER FRIE AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. A. Consideration to approve a resolution reauesting the City Council of the Citv of Monticello call for a public hearing on a modification to the Redevelopment Plan for Central Monticello Redevelopment Proiect No.1 and the establislnnent of a TIF Plan for TIF District No. 1-38 (an Economic Development District) therein and the adoption of a TIF Plan therefor. . The HRA was requested to approve a resolution requesting the City Council on February 26, 2007, call for a public hearing date of Apri123, 2007, to consider the proposed adoption of the modification of the Redevelopment Plan and the establislnnent ofTIF District No. 1-38 and its plan association with the Walker In-Store project. This will allow Ehlers & Associates to prepare and distribute the T1F Plan in the absence of the Executive Director. COMMISSIONER FAIR MADE A MOTION TO APPROVE A RESOLUTION REQUESTING THE CITY COUNCIL OF THE CITY OF MONTICELLO CALL FOR A PUBLIC HEARING ON A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 AND THE ESTABLISHMENT OF TIF PLAN FOR TIF DISTRICT NO. 1-38 (AN ECONOMIC DEVELOPMENT DISTRICT) THEREIN AND THE ADOPTION OF A TIF PLAN THEREFOR. COMMISSIONER FRIE SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. B. Consideration to approve a resolution calling for a l'ublic hearing on the moposed awarding of a Business Subsidv to WRE. LLC. . The HRA was requested to approve a resolution calling for a public hearing on the proposed awarding of a Business Subsidy to WRE, LLC dba Walker In-Store. If an individual entity . . . BRA Minutes - 02/07/07 receives a public subsidy of greater than $100,000 a public hearing must be held. WRE, LLC will create at least 11 new jobs for the City of Monticello at an average wage-level of at least $18.81 per hour without benefits and will construct a 10,240 sq ft facility. The HRA public hearing will be April 11 , 2007. COMMISSIONER FAIR MADE A MOTION TO APPROVE THE RESOLUTION CALLING FOR A PUBLIC HEARING ON THE PROPOSED AWARDING OF A BUSINESS SUBSIDY TO WRE, LLC. COMMISSIONER FRIE SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. 6 Consideration to assess the Transformation Home Loan ProlITam and aoorove continuation of the ProlITam. The HRA established the Transformation Home Loan Program two years ago and requested an annual assessment of the program. Two loans were approved and disbursed and another loan approved but did not meet the definition of "substandard". An amount of $150,000 was earmarked for the program from pooling dollars ofTIF District No. 1-22 and has a remaining balance of $11 0,154. A brief discussion centered around the potential use of the program by a contractor who purchased, renovated, and then sold the home. Fair preferred not to use the program as a subsidy for contractors. Given the average selling price on homes within the downtown area is about $170,000, the commissioners agreed to leave the assessed market value for 2007 at $175,000 or less. The commissioners encouraged marketing the program to the lenders, contractors, and real estate agents. COMMISSIONER FRIE MADE A MOTION TO CONTINUE THE TRANSFORMATION HOME LOAN PROGRAM FOR 2007 EXPANDING THE PROGRAM BOUNDARIES TO INCLUDE THE EAST AND WEST CITY LIMITS AND NORTH SIDE OF INTERSTATE 94. COMMISSIONER FAIR SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FRIE, FAIR, AND BARGER. NAYS: NONE. 7. Consideration to review estimated revenues and exoenditures for Otter Creek Crossing and assess need to amend discount orice of$1.00 oer so ft. This being an information item only, no action was necessary or taken by the commissioners. The commissioners agreed to keep the market price at $3.00 per sq. ft. and the reduced price at $1.00 per sq. ft. for qualified buyers. The goal is to create jobs at higher wage-levels and to increase the tax base. The estimated expenditures were based on full development ofthe park ($2.31 per sq ft) and the revenues on the 25.7 acres developed to date ($2.41 per sq. ft.) The majority ofthe improvements have been constructed in Phase I and II. It is estimated 53.3 acres remain for sale and developable. 8. Consideration to resoond to negotiations bv Steve Conrov (carrv-over.) Given Froslie had inquired as to the status of the negotiations on December 28, the 3 . HRA Minutes - 02/07/07 commissioners reviewed the offers and counter-offers and acknowledged the Springborg parcel had sold. The commissioners agreed to re-offer Froslie the November 3 HRA offer of $327,789 with use of the property for 2-3 years. The offer good through April 11,2007, as the HRA is looking at other properties to purchase. Koropchak to notifY Conroy of the HRA's February offer. 9. Consideration to reschedule the HRA annual meeting date in Aoril. 10. . In lieu of the fact that the HRA Treasurer and Executive Director will return to the office April 9 and April 2, respectively, the following action was taken. COMMISSIONER FAIR MADE A MOTION TO RESCHEDULE THE HRA ANNUAL MEETING FROM APRIL 4, TO APRIL 11,2007. COMMISSIONER FRIE SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. Consideration to authorize oavrnent ofHRA bills and acceot the Ehlers' 2007 hourlv rate mcrease. COMMISSIONER FAIR MADE A MOTION TO AUTHORIZE PAYMENT OF THE HRA BILLS SUBMITIED. COMMISSIONER FRIE SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. COMMISSIONER FAIR MADE A MOTION TO ACCEPT EHLERS ' HOURLY INCREASE OF $5.00 COMMENCING JANUARY 1,2007. SECONDED BY COMMISSIONER FRIE AND WITH NO FURTHER DISCUSSION, THE MOTION CARRIED. YEAS: FAIR, FRIE, AND BARGER. NAYS: NONE. 11. Consideration ofHRA Executive Reoort. 12. . Report accepted as written. Committee Reoorts: Marketing - Koropchak noted the attached update to the ad and city community page for the Wright County Economic Development Partnerships 2007 Directory. Three companies have been contacted for a new billboard location along 1-94 in 2007. February 12 at 10:00 a.m. Kleinwachter and Koropchak will meet with SCSU students to answer questions about the Feasibility Study. Fiber Ootics - Koropchak reported that the pre-engineering design and RFP are underway as this is a requirement of the revenue bonding and was previously approved by the Council. Next Council workshop and action sometime in March. Como Plan - Frie reported the February 1 meeting focused on 4 . . . HRA Minutes - 02/07/07 industrial. Industrial was defined as general industry and business campus. Three areas were suggested: expansion of the Monticello Business Center to the south and north as business campus, southeast area of Highway 25 and 85th A venue as general industrial, and northwest area by proposed future I-94/0rchard Interchange. Next meeting February 22 will focus on housing. 13. Next re!!:Ular HRA meeting - The commissioners agreed to cancel the Wednesday, March 7, 2007 HRA meeting in lieu of the HRA Treasurer and Executive Director scheduled to be out of the office. A special meeting will be called if so determined. 14. Adjournment. COMMISSIONER FAIR MADE A MOTION TO ADJOURN THE HRA MEETING. SECONDED BY COMMISSIONER FRIE AND WITH NO FURTHER BUSINESS, THE HRA MEETING ADJOURNED AT 7:30 P.M. Recorder HRA Chair 5 . 4A. . . HRA Agenda - 04/11/07 Consideration to annrove the Certificate of Comnletion for SL Real Estate Holdinl!s LLC dba Karlsburl!er Foods. Inc. A. Reference and backl!round: The HRA is asked to approved the Certificate of Completion for the SL Real Estate Holdings LLC. The Building Department has issued the Certificate of Occupancy. It is my understanding, the Karlsburger Foods moved from Dayton, MN into their new facility along Chelsea Road in mid-March. As indicated in the Contract upon issuance of the Certificate of Completion, copies of invoices are submitted to the redeveloper and any insufficient administrative costs, the redeveloper is obligated to pay such shortfall within 15 days. Attached to a summary of the administrative costs to date. I did ask Kennedy & Graven to review the legal fees as some did not appear appropriate or were not related to the preparation of the Contract or the closing. B. Alternative Actions: 1. Motion to approve the Certificate of Completion for SL Real Estate Holdings LLC. 2. Motion to deny approval of the Certificate of Completion for SL Real Estate Holdings LLC. 3. Motion to table any action. C. Recommendation: Recommendation is Alternative No.1. D. Sunnortinl! Data: Copy of certificate of completion, certificate of occupancy, and summary of invoices. I . . . CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota, as Deed Document Number(s) A 1021752 and A I0217~1 , respectively, has conveyed to SL Real Estate Holdings LLC, a Minnesota limited liability company, (the "Grantee"), the following described land in County of Wright and State of Minnesota, to-wit: Lot 1, Block 1, Otter Creek Crossing 2nd Addition, according to the recorded plat thereof, Wright County, Minnesota ' and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the, but the covenants created by Sections 3 and 4 of said Deed shall remain in full force and effect. Dated: ,2007. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, Mll{NESOTA By Authority Representative This instrument was drafted by: ......... . ......... . ......... . .................... ~.::::...:::::::::::: . .. .. . 0"_..... '" ...... '" ...... ......... . ......... . ......... . ......... . ......... . Kennedy & Graven, Chartered 470 US Bank Plaza Minneapolis, Minnesota 55402 . TIF DISTRICT NO. 1-37 SL REAL ESTATE HOLDINGS LLC ADMINISTRATIVE COSTS per Purchase and Redevelopment Contract, Section 3.9 Pavment of Administrative Costs. April 3, 2007 Ehlers & Associates, April 2006 $ 3,750.00 Ehlers & Associates, May 2006 $ 3,750.00 Subtotal $ 7,500.00 Kennedy & Graven April 2006 $ 6,591.00 June 2006 $ 492.00 September 2006 $ 637.00 October 2006 $ 1,835.56 Subtotal $ 9,555.56 TOTAL ADMINISTRATIVE COSTS $17,055.56 e Less deposit, February 2006 $10,000.00 AMOUNT DUE AND PAYABLE TO MONTICELLO HRA $ 7,055.56 GENERAL GRADING REIMBURSEMENT, Section 3.6. Soils. Environmental Conditions. Gradinl!. (b) reimbursement subject to costs excess of$.12 per sq ft and reasonable evidence of costs and payment. Less general grading, 1.621 acres or 71,046.36 sq. ft. @ $.12 per sq ft $ 8,525.56 - Project TIF District No. 1-37 - Economic Development Hours Amount / Ehlers & Associates, Inc. Leaders in Public Finance 3060 Centre Pointe Drive Roseville, MN 55113 (651) 697-8500 Financial Advisory Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, Suite 1 Monticello, MN 55362-8822 Invoice #: Invoice Date: 332555 April 10, 2006 -;1 Date Worked k Descriotion of Services 03-20-2006 ED Prepared: Quality contrgl review of District 1-37 NM For the Establishment ofTax Increment Financing District No. 1-37 (1st 1/2) , 1.50 no charge 3,750.00 e 1.50 $3,750.00 Amount Due This Invoice $3,7.!i0.00 ffiJ~ 9J{~ '). \ ~. ~ l.t "bo l. ~ ~ CJ. q I~ ~2#P~ Li~\'~\) (Detach at perforation and return lower portion to Ehlers & Associates, Inc.) ~~ \--\Q'f\ ,. "':"In Ie. . , ,'_,';, e"''C "\o;o;,~4-...(.;t Monticello Housing And Redevelopment Authority ~ ENTERED Invoice #: Invoice Date: 332555 April 10,2006 $3,750.00 Amount Due This Invoice - I L Please remit payment to: Ehlers & Associates, Inc. Alln: Accounts Receivable 3060 Centre Pointe Drive Roseville, MN 55113 Due Upon Receipt '..\L(.~ \\ s~/" ;>)... "'/~/o~ }/' -y\ \r ~ l-l/iJ ~3,7 ~~, '":) \ qq -..~;r--- ..~~ Sr\ \-OC(z / Ehlers & Associates, Inc. leaders in Public Finance 3060 Centre pointe Drive Roseville, MN 55113 (651) 697-8500 Financial Advisory Services Invoice Monticello Housing And Redevelopment Authority 505 Walnut Street, suite 1 Monticello, MN 55362-8822 Invoice #: C ~27~ Invoice Date: ay, 2006 Project: TIF District No. 1.37 - Economic Development Date Worked J2Y- Descriotion of Services ED Prepared: Quality control review of District 1-37 NS For the Establishment of T\F District No. 1-37 Hours Amount 1.50 no charge 3,750.00 -- 1.50 $3,750.00 $3,750.00 e 03-20-2006 Amount Due This Invoice ~\~. v. . ' ~ ,~_,___ _' __".__"'- _._ ..'''__ '.'''__ "A"- ,. 0_"__ , ""..,..a. 1__' - . City of Monticello April 30, 2006 MN190-00123 Through April 30, 2006 Page: 4 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 I'fG ~trP . lD~ I ,..J"t;[.rLfI ~\1 {/ \,;V' ~. ~' . ...... ~. ~ (, 'I. . '?l ~. q ~ ~~l. r::, 01....10 <:"-u ~ -\ 0 Q,'S\ \.~'l ~ ~."")._O'-t Economic Development TIF 1-37 (Karlsburger Foods) For All Legal Services As Follows: 2/20/2006 SJB Emails from O. Koropchak re: new land sale; check on status on access 2/21/2006 2/22/2006 e 2/22/2006 2/23/2006 2/24/2006 2/24/2006 2/24/2006 2/24/2006 2/27/2006 2/27/2006 2/28/2006 3/1/2006 3/2/2006 - 3/3/2006 3/3/2006 3/3/2006 SJB Phone call with O. Koropchak re: new TIF DistricUKarlsburger SJB Review Ehlers schedule; conference with M Ingram re: Plan MNI Review of Monticello TIF dist modification documents. MNI Begin drafting business subsidy agreement for Karlsburger. MNI Phone call to Nikki Shannon at Ehlers reo resolutions. MNI Review of business points and Dahlheimer file - email to S Bubul reo next steps. MNI Conference reo Monticello TIF District. MNI Voicemail to Ollie Koropchak reo public hearing on land sale. MNI Consultation w/ S Bubul reo land sale; phone call to Ollie K. reo same. MNI Document review. SJB Emails with O. Koropchak; phone call with same re: status, terms, grading MNI Call to Nikki Shannon reo public hearing notices. SJB Emails to and from Koropchak et al re: terms; phone call with Koropchak re: same; research term of road easement MNI Review contract points, draft CPO. MNI Draft CPO. MNI Draft notice of public hearing for land sale, business subsidy. Hours Amount 0.20 38.00 0.50 95.00 0.30 57.00 1.50 240.00 1.00 160.00 0.20 32.00 1.00 160.00 0.30 48.00 0.10 16.00 0.50 80.00 1AO 224.00 0.60 114.00 0.10 16.00 0.75 142.50 OAO 64.00 1.00 160.00 0.50 80.00 . Page: 5 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 City of Monticello April 30, 2006 3/6/2006 MNI Draft CPO. 1.00 160.00 3/6/2006 MNI Revise notice and send to Nikki Shannon at Ehiers. 0.40 64.00 3/7/2006 SJB Emails with Ehlers re: resolutions 0.25 47.50 3/7/2006 MNI Draft CPO. 1.00 160.00 3/7/2006 MNI Reviewing schedule and resolutions for Karlsburger. 0.30 48.00 3/8/2006 MNI Review resolutions sent by Ehlers, finalize CPO. 1.40 224.00 3/8/2006 MNI Resolutions. 0.70 112.00 3/9/2006 SJB Phone call with O. Koropchak 0.50 95.00 - 3/10/2006 MNI Revision of HRA resolution approving purchase and 0.40 64.00 redevelopment contract and business subsidy, and city council resolutions approving iand sale and business subsidy. 3/21/2006 MNI Revisions to Karlslburger purchase and redevelopment 0040 64.00 contract. 3/22/2006 SJB Conference with M Ingram re: easement questions 0.25 47.50 3/22/2006 MNI Revise purchase and redevelopment contract. 1.00 160.00 3/22/2006 MNI Voicemail to Todd Hagen concerning assessed value of 0.10 16.00 improvements for assessment agreement. 3/22/2006 MNI Voice mail to Rick Wolfsteller concerning developer 0.10 16.00 contact information, status of ponding easement 3/22/2006 MNI Voicemail to Bret Weiss concerning general grading 0.10 16.00 (definition for purposes of contract) and facts for ponding easemenUcontract. 3/22/2006 MNI Call from Angela with city of Monticello. Gave contact info 0.10 16.00 for Michaei Maher of Karlsburger, also informed me that plat shows an easement so no need for separate easement agreement. 3/22/2006 MNI Consultation with B Johnson regarding easement for 0.20 32.00 - Karlsburger contract. 3/23/2006 SJB Conference with M Ingram re: contract; easement 0.75 142.50 3/23/2006 MNI Phone call from Todd Hagen at Ehlers regarding minimum 0.10 16.00 . Page: 6 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 City of Monticello April 30, 2006 assessed value 3/23/2006 MNI Finalize contract. 1.50 240.00 3/23/2006 MNI Voicemail to Shabani at WSB regarding her message to 0.10 16.00 me to clarify additional pond easement questions. 3/23/2006 MNI Conversation with Shibani at WSB regarding general 0.20 32.00 grading and easement issues. She suggested definition substantially the same as Dahlheimer contract, ciarified that city has maintenance responsibility for pond. 3/23/2006 MNI Call to Todd Hagen verifying assessed value as $1 million. 0.10 16.00 - 3/24/2006 SJB Conference with Ehlers, City re: revised hearing schedule 0.50 95.00 for subsidy 312412006 MNI Call to Nikki at Ehlers regarding notice of public hearing 0.10 16.00 (HRA) and possibility of special meeting. 312412006 MNI Call to Rick Wolfsteller at City regarding possibility of 0.10 16.00 changing public hearing to April 12 (special meeting of HRA) due to failure to publish hearing notice. 312412006 MNI Review of revised public hearing notice; email outlining 0.40 64.00 change to ail parties; revision of resolutions. 312412006 MNI Review TIF Plan for Dist. 1-37. 0.90 144.00 312412006 MNI Phone call to Nikki at Ehlers regarding language missing 0.10 16.00 from business subsidy portion of notice of public hearing. 312412006 MNI Revise notice of public hearing to include required 0.20 32.00 business subsidy language. 3127/2006 MNI Review TIF plan. 0.30 48.00 312812006 MNI Review TIF plan for District 1-37, Karlsburger. 1.50 240.00 3129/2006 MNI Call to Ollie at HRA - had several suggested changes to 0.40 64.00 Purchase and Redevelopment Contract, which I noted and will insert. Also discussed necessary resolutions for HRA meeting on the 12th. ~ 312912006 MNI Finalize HRA resolutions and send to Ollie. 0.50 80.00 3/29/2006 MNI Revisions to Contract as per Ollie's suggested changes. 0.80 128.00 4/512006 MNI Email to Nikki regarding business subsidy meeting. 0.10 16.00 . Page: 7 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 City of Monticello April 30, 2006 4/5/2006 MNI Review letter from Todd Hagen containing District 1-37 0.10 16.00 map. 4/5/2006 MNI Phone call to Ollie regarding Karlsburger (acreage of land 0.20 32.00 sold to developer will decrease somewhat because size of drainage easement has increased). 4/5/2006 MNI Clarification em ail to Nikki at Ehlers regarding business 0.10 16.00 subsidy resolutions - both HRA and city must approve, and both resolutions have been drafted. 4/6/2006 SJB Conference with M Ingram, O. Koropchak re: easement 0.75 142.50 area, revised price, effect on contract . 4/6/2006 MNI Finalize second draft of contract, including updated 1.00 160.00 acreage of conveyance and easement, and send to Ollie and Karlsburger. 4/6/2006 MNI Revise Assessment Agreement to remove reference to 0.20 32.00 townhomes; send to Ollie. 4/12/2006 MNI Meeting with Ollie, City, Ehlers regarding accounting 3.80 608.00 related to industrial park. 4/13/2006 SJB Conference with M Ingram re: contract 0.30 57.00 4/13/2006 MNI Revisions to Karlsburger contract as per email from Ollie. 1.30 208.00 4/13/2006 MNI Phone call to Ollie K. regarding status of plat. County is 0.10 16.00 still reviewing so WSB does not want to release it yet, in case there are changes. Will call Steven Ische regarding schedule for recording. Also discussed need for Mike Maher to involve his attorney as we proceed to closing. 4/13/2006 MNI Call to Steven Ische at WSB regarding status of plat. 0.10 16.00 4/17/2006 SJB Review TIF resolution 0.50 95.00 4/17/2006 MNI Review of City Council resolution establishing TIF District 1.50 240.00 1-37; revisions to findings and Walser analysis. 4/18/2006 SJB Conference with M Ingram re: City resolution 0.25 47.50 4/18/2006 MNI Revise City Council resolution adopting TIF Plan as per 0.40 64.00 e comments by S Bubul. 4/18/2006 MNI Email to Nikki, Ollie with revised resolution and suggested 0.30 48.00 change to TIF summary. . Page: 8 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 City of Monticello April 30, 2006 4/20/2006 SJB Emails to/from O. Koropchak re: grading cost 0.25 4/24/2006 MNI Review TIF Plan for Dis!. 1-37. 0.70 4/26/2006 SJB Emails re: CPD 0.25 4/26/2006 MNI Email reply to Ollie's update on Karlsburger: Verify closing 0.60 date, grading costs. Total Services: $ Total Services and Disbursements: $ . e 47.50 112.00 47.50 96.00 6,591.00 6,591.00 I / ti. , , I , Page: 6 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 O~< TO PAY? Oll,~ 'l ",oll-6 Code:?\'3. 4~ S'? . Initial ~ ~ -?.J.I ,0 le. u<;)~- 0-0'\ ~ City of Monticello ...., JeJ ENTERED June 30, 2006 MN190-00123 "00;' Economic Development TIF 1-37 (Karlsburger Foods) Through June 30, 2006 For All Legal Services As Follows: Hours Amount 5/2/2006 MNi Review of plat from Ollie, insert,into CPO. 0.20 32.00 5/3/2006 MNI Phone call from Ollie K. regarding Purchase and 0.30 48.00 Redevelopment Contract. 5/9/2006 MNI Temporary easement language added to Purchase and 0.50 80.00 Redevelopment Contract. . 5/1012006 SJB Review CPD change re easement 0.20 38.00 5/1012006 MNI Temporary easement language for Contract. 0.60 96.00 5/1 0/2006 MNI Phone call from Ollie regarding temporary easement. 0.10 16.00 5/12/2006 MNI Call to Karen Knoll at title company 0.10 16.00 5/22/2006 MNI Revise Karlsburger contract - date of closing changed to 0.20 32.00 June 30. 6/12/2006 MNI Phone call from Ollie regarding lack of evidence of 0.10 16.00 financing from developer on Karlsburger deal. 6/12/2006 MNI Email to Ollie regarding permanent financing for 0.10 16.00 Karlsburger 6/21/2006 SJB Email O. Koropchak re: change in closing date, contract 0.20 38.00 changes 6/22/2006 MNI Draft Amendment to Contract extending closing. OAO 64.00 Total Services: $ 492.00 Total Services and Disbursements: $ 492.00 e Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 41-1225694 September 11, 2006 Invoice # 73236 City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 MN190-00123 Economic Development TIF 1-37 (Karlsburger Foods) Through July 31,2006 For All Legal Services As Follows: 7/12/2006 NKE Phone call with Commercial Partners re title commitment; review title commitment Hours 0.25 7/13/2006 . 7/13/2006 NKE Intraoffice meeting with M. Ingram; emall with O. Koropchak MNI Revise first amendment to contract, changing closing 0.40 date; consultation with N England about estimated date of closing; verify with Ollie and send amendment. 0.25 7/21/2006 7/31/2006 SJB Review TIF transcript; phone call with Ruff re same 0.40 NKE Review development agreement and title commitment; 3.00 prepare closing documents; email to 0 Koropchak; phone call with Commercial Partners. 7/31/2006 MNI Review closing documents from N England. 0.70 Total Services: $ Total Services and Disbursements:$ , 0:< TO PAY? 01\.(, Code: . Initial Amount 27.50 27.50 64.00 76.00 330.00 112.00 637.00 637.00 City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapoiis, MN 55402 (612) 337-9300 Tax 10 No. 41-1225694 September 11 , 2006 Throuoh Julv 31. 2006 MN190-00123 Economic Development TIF 1-37 (Karlsburger Foods) . 637.00 Total Current Billing: 637.00 I declare, under penalty of law, that this account, claim or demand is just and correct and that no art of it has bee id. '. '....,~~. [c' .1"('\ . [ ", ., e\i\.).~~.".': ',\ " " ", . - ..',-1, . It'll), ,,?o,-\'O -:,e \ . Ll..U- l6 ")...\'7' q_\o.-~ -, ,'Ii C'~p 9 2005 , .-.1_ \ ' ,?I\ <'\~~ cP~ '"0 eo JEJ ENTERED , " , Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 Tax 10 No. 41-1225694 October 13, 2006 City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 Throuoh Auoust31.2006 MN190-00123 Economic Development TIF 1-37 (Karlsburger Foods) 1,835.56 . . !,~i;t,('. .;Vh'f".);:-lr>~.'J. . ) Lc, i.!l..-)\.-lr:t.:-c;I: ',: L! 'I' "- I :!- -: '1,'5' IJ '~, - .;~, !, I !, ~,_. ! 1~-'-' ~-.-. n'l l:S J006 .1',. 'i, OCT-.'1 1 ' . ......~---::o;::l r~ fr'"\.! ..... .,.1., ;1' jit :;,11' 72006 ", ") ""'AY? Oil . t. r-. ... )\\t..- '..?-I 3. ~~ '?Je>\. z>oL{.O tv, ~ \~-~'\-o\.o }\dJ0 .[71190 C[tlo , 'J1YVl e Total Current Billing: 1,835.56 I declare, under penalty of law, that this account, claim or demand Is just and correct and that rt of it has be paid. J?j 'i,~\\'i,\l "\ x:~ Co~, \ - '3~ e ...';.1' I J II: : , .,\!.J .-kvPM~CV(e,h C\.r..pP",;J- , (j//'\J'Y'f\ Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 41-1225694 October 13, 2006 Invoice # 73720 City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 Economic Development TIF 1-37 (Karlsburger Foods) MN190-00123 Through August 31,2006 For All Legal Services As Follows: Hours Amount 8/1/2006 NKE Emails with 0 Koropchak re closing; phone call with 0.25 27.50 Commercial Partners. 8/2/2006 NKE Revise closing documents; email to 0 Koropchak. 0.50 55.00 . 8/4/2006 NKE Phone call with Commercial Partners re closing. 0.25 27.50 8/7/2006 NKE Email with 0 Koropchak regarding closing documents and 0.25 27.50 closing. 8/8/2006 NKE Review executed closing documents; schedule closing 0.50 55.00 with Commercial Partners. 8/9/2006 NKE Email with 0 Koropchak; phone call with G Larson re 1.00 110.00 closing; email purchase agreement to G Larson. 8/11/2006 NKE Phone call with G Larson re closing and subordination 0.75 82.50 agreement; emails with M Ingram and 0 Koropchak. 8/11/2006 MNI Draft assessment agreement for Karlsburger; email to N 0.80 128.00 England regarding follow-up and voice mail to Ollie K at City regarding closing. 8/12/2006 NKE Prepare suboringation agreement; email to M Ingram; 0.75 82.50 review closing statement; email to G Larson. 8/14/2006 NKE Review revised closing statement; email and phone call 2.50 275.00 with with 0 Koropchak; email to G Larson and K Raw; phone call with G Larson to reveiw closing documents; phone call with G Larson re closing. 8/15/2006 NKE Phone call with M Ingram re subordination agreement; 3.00 330.00 phone call with G Larson re dates of resolutinos; review subordination agreement and revise. . 8/15/2006 MNI Review and revise subordination agreement for 1.90 304.00 Karlsburger. 8/17/2006 NKE Letter to G Larson re subordination agreement; prepare 1.00 110.00 Page: 2 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 City of Monticello August 31, 2006 table of contents and closing book. 8/21/2006 MNI Follow-up with N England and S Bubul regarding 0.20 32.00 subordination agreement for Karlsburger. 8/22/2006 MNI Phone call to Ollie K to request that HRA approve 0.20 32.00 subordination agreement on its consent agenda at next HRA meeting; question from Ollie on right of first refusal concept. 8/28/2006 NKE Look up statute for publication requirement; phone call 0.50 55.00 with 0 Koropchak; phone call with M Ingram; email 0 Koropchak. 8/28/2006 MNI Call from Ollie regarding EDA loan to Karlsburger - will 0.30 48.00 e constitute business subsidy, but EDA has not decided on terms yet. Total Services: $ 1,781.50 For All Disbursements As Follows: Photocopies 47.60 Postage 1.26 8/23/2006 American Office Products - Tabs 5.20 Total Disbursements: $ 54.06 Total Services and Disbursements: $ 1,835.56 e ~ 1,_ ~,,~~_ Message Page 1 of 1 . Ollie Koropchak From: Bubul, Stephen J. [sbubul@Kennedy-Graven.com] Sent: Monday, March 19, 2007 5:44 PM To: Ollie Koropchak Subject: Karlsburger Foods Ollie: I'm belatedly getting back to you about your questions on the invoice. I can't recall your vacation dates, but I think you're probably in Florida now. Call me when you get back and I can hopefully answer your questions. Stephen Bubul Kennedy & Graven 470 U.S. Bank Plaza Minneapolis, MN 55402 612-337-9228 This notice is required by IRS Circular 230, which regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding correspondence and or any attacIunent is a written tax advice communication, it is not a full "covered opinion." Accordingly, this advice is not intended and cannot be used for the purpose of (I) avoiding penalties that may be imposed under the Internal Revenue Code of 1986, as amended, or (2) promoting, marketing, or recommending to another party any matters addressed herein. . This message (including any attacIunents) is from a law firm and may contain confidential client information or an attorney- client communication that is confidential and privileged by law. The information is intended only for the use of the individual or entity to whom it is addressed. If you are not the addressee or the employee or agent responsible to deliver this e-mail to its intended recipient, please delete this message (and any attacIunents) without any review, distribution, or copying and notifY the sender of the inadvertent transmission. e 4/3/2007 +-+ YJ . N ~ ~u O Z N 7 -~. ~ Ys' ~~bEp®w® ~,\ sg~. ~~~OA r~ -~3 {H <. ~. 0 a 0 ~~ I a x re F R ~X ~..:I "Y .--b /.? «.~~r, ~ZMrr N ~ ~r~~~ m't m ~,s^~ pD`x~c U ~ m ~ LL ~~ a 3 v O,rtwo~d 4/11/2007 .Customer Full Report, Commercial/Mixed Use, MLS#: 3348975 201 E Broadway St, Monticello, MN 55362-9317 Mappo nr Status: Active '°~---~. ~ 'fir,. I ist Price: $459.900 Map Page: 31 Map Coord: D2 Directions: 94 to Hwy 25 North, East on Braodway to Garden Center on Left MLS Area: 341 -Wright County (Except Buffalo) TAX INFORMATION CMU Style: Industrial/Warehouse, Other, Retail/Shopping Center Property ID: 7155010067010 Current Use: Commercial Tax Year: Tax Amt: 2007 14,963.00 Const Status: Previously Owned 1970 Assess Bal: 0•~ Total Units: 1 Year Built: 12 1 Tax w/assess: 14,983.00 . Foundation Size: 6,494 Acres: Building Finished SgFt: 6,494 Lot Dimen: see plat Assess Pend: No Homestead: No General Property Information Legal Description: Lenghty County: WRIG -Wright School District: 882 -Monticello, 763-271-0300 Complex/Dev/Sub: Lot Description: Road Frontage: Zoning: BusinesslCommen;ial Accessibility: None LakelVllaterfront: Lake Name: Owner Occupied: Yes Owner is an Agent?: No Public Remarks: 1.12 acres of prime commercial land on high traffic mainstreet, sale price includes land and buildings, 8494 sq ft building currently used as garden retail center. great location for possible redevelopment, traffic counts are high w/ great frontagel Structure Information Heat: Forced Air Fuel: Natural Gas Air Cnd: Garage Stalls: 0•~ Other Parking: 0 Parking Char. Other Utilities: Miscellaneous: Sale Includes: Building, Land Appliances: No. of Ranges: No. of Refrig: Basement: Pool: Shared Rooms: Amenities-Shared: Amenities-Unit: Exterior: Wood Fencing: Roof: Water: City Water -Connected Sewer: City Sewer -Connected Information Deemed Reliable But Not Guaranteed. ®2007 Regional MLS of Minn., Inc. All Rights Reserved. ~r ~~ ~ _ ~p;S,~} 25-.. ~~ `75! '~'~• ('~ 201 Broadway E ~ $ ~~~ ~ 7tl~ R f ~~ s~,eRGp ®2006 eewTEO.aeC/arTele gtlaz,loc. Page 1 of 2 . . . HRA Agenda - 04/11/07 5. Consideration to aoorove a resolution adootinl! of the modification to the Redevelooment Plan for Central Monticello Redevelooment Proiect No.1 and establishin~ TIF District No. 1-38 therein and the adootion of the TIF Plan therefor. Aoolicant: Walker In-Store. A. Reference and Backl!round: TIF District No. 1-38, an Economic District, is being created to assist with land and public improvement costs associated with development and purchase of the Monticello Business Center. WRE LLC, dba, Walker In-Store, plans to construct a 10,240 sq ft office/production/warehouse facility in the city-owned industrial park. The proposed project will bring 11 full-time permanent jobs at an average wage-level of$18.81 per hour without benefits. The company markets in-store display strategies, and sells, assembles, and distributes in-store display products such as shelving, etc. On February 26,2007, the City Council called for a public hearing date of April 23, 2007, and on September 25, 2006, the City Council approved the final plat for Lot 2, Block 1, Otter Creek Crossing 3nd Addition. On April 3, 2007, the Planning Commission approved a resolution finding the proposed TIP District project conformed with the redevelopment and development goals for the city of Monticello. The proposed TIF Plan was distributed to the County and School District on March 19,2007, in order to meet the 30-day notice for comment prior to the public hearing of the Council scheduled for April 23, 2007. It is anticipated the land closing will take place May 1 or soon thereafter with construction to commence within 30 days of closing. The attached resolution for approval states the findings of the HRA and authorizes the HRA Director to proceed. TIP District 1-38, an Economic District, has a life duration will be eight years after receipt of the first increment to the HRA which is expected in 2009. An Economic District must create new jobs and can be used to assist manufacturing, warehousing, and distribution centers. Prior to the HRA' s reduced land offer to Mr. Walker, HRA Attorney Bubul was consulted to verifY the nature of the business met the qualification for establishment of an Economic District. The attached maps show the boundaries of the Redevelopment Project No.1 and proposed TIP District 1-38. Based on the TIP Cashflow ran by Ehlers & Associates using a building market value of$512,000 ($50.00), improved land value of$196,020 ($2.70) and a 8 % interest rate; the project is estimated to generate approximately $112,798 of net tax increment 1 . HRA Agenda - 04/11/07 over the life of the district. The proposed sources of revenue/bonded indebtedness is $160,000. B. Alternative Action: 1. A motion to approve a resolution adopting the modification to the Redevelopment Plan for Central Monticello Redevelopment Project No.1 and establishing TIF District No. 1-38 therein and the adoption ofthe TIF Plan therefor. 2. A motion to deny approval of the resolution adopting the modification....................... 3. A motion to table any action. C. Recommendation: The City Finance Director and HRA Executive Director recommend alternative no. I. The proposed new wage-levels, number of jobs, and building size meet the criteria and the project complies with the Declaration of Covenants and Minnesota Statutues. . D. SUDDortin2 Data: Resolution for adoption and TIP Plan including maps. . 2 . MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-38 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the Monticello Housing and Redevelopment Authority (the "HRA") and the City of Monticello (the "City") that the HRA adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1 (the "Redevelopment Plan Modification") and establish Tax Increment Financing District No. 1-38 and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the "Plans"), all pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's consideration; and 3. expanded. The boundaries of Central Monticello Redevelopment Project No. 1 are not being . WHEREAS, the lIRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and WHEREAS, the HRA has performed all actions required by law to be performed prior to the adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review of and written comment on the Plans and that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Board as follows: 1. The HRA hereby fmds that Tax Increment Financing District No. 1.38 is in the public interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. 12, and finds that the Plans conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is underutilized and that the adoption of the proposed Plans will discourage commerce and industry from moving their operations to another state or municipality and thereby serves a public pwpose. 2. The HRA further fmds that the Plans will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the development or redevelopment of the project area by private enterprise in that the intent is to provide only that public assistance necessary to make the private developments fmancially feasible. . 4. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the Executive Director of the HRA. . 5. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project or a Development Agreement with any developer. 6. Upon approval of the Plans by the City Council, the Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Minnesota Department of Revenue and Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a. Chair 7. The Executive Director of the HRA is authorized and directed to forward a copy of the Plans to the Wright County Auditor and request that the Wright County Auditor certify the original tax capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177. Approved by the Board of Cormnissioners of the Monticello Housing and Redevelopment Authority this 11 th day of April, 2007. . ATTEST: Executive Director . . As of March 19,2007 f!NJi for Fiscal1mplicatiol'ls MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 & ASSOCIATES INC Prepared by: EHLERS & ASSOCIATES, INC. 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com and the TAX INCREMENT FINANCING PLAN for the establishment of TAX INCREMENT FINANCING DISTRICT NO. 1-38 (an economic development district) within CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY CITY OF MONTICELLO WRIGHT COUNTY STATE OF MINNESOTA Public Hearing: April 23, 2007 Adopted: This document is in draft form for distribution to the County and the School District. The TiF Plan contains the estimatedftscal and economic implications of the proposed TiF District. The City and the HRA may make minor changes to this draft document prior to the public hearing. . EHLERS . . . TABLE OF CONTENTS (for reference purposes only) SECTION 1- MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1. . .. ... . . . . . .. 1-1 Foreword ............................................................. 1-1 SECTION II - TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-38 ....................... 2-1 Subsection 2-1. Foreword............................................... 2-1 Subsection 2-2. Statutory Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1 Subsection 2-3. Statement of Objectives ................................... 2-1 Subsection 2-4. Redevelopment Plan Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2 Subsection 2-6. Classification of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-2 Subsection 2-7. Duration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-3 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements. . . . . . . . . . . . . . .. 2-3 Subsection 2-9. Sources of Revenue/Bonded Indebtedness .................... 2-4 Subsection 2-10. Uses of Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-5 Subsection 2-11. Business Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-6 Subsection 2-12. County Road Costs. . . . . . . . . . ... . . .. .. . ... . . .. . .. . . . . . . . .. 2-7 Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions. . . . . . . . . . . . . . . .. 2-7 Subsection 2-14. Supporting Documentation. . . . . . .. . . . . .. . . . . . . .. .. ... .. . . .. 2-8 Subsection 2-15. Definition of Tax Increment Revenues ........................ 2-9 Subsection 2-16. Modifications to the District. .. . . . . . . . . . .. ... .. . . . . . . . . . . .. .. 2-9 Subsection 2-17. Administrative Expenses.. . ... . . . . . . . . . . . .. .. . . . . . . . . . .. .. 2-10 Subsection 2-18. Limitation of Increment. . . .. .. . . . . . .. . . . . .. .. ... . . . . . .. . .. 2-10 Subsection 2-19. Use of Tax Increment .................................... 2-11 Subsection 2-20. Excess Increments ...................................... 2-11 Subsection 2-21. Requirements for Agreements with the Developer. . . . .. ... . .. .. 2-12 Subsection 2-22. Assessment Agreements ................................. 2-12 Subsection 2-23. Administration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-12 Subsection 2-24. Annual Disclosure Requirements ........................... 2-12 Subsection 2-25. Reasonable Expectations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-13 Subsection 2-26. Other Limitations on the Use of Tax Increment. . . . . . . . . . . . . . . .. 2-13 Subsection 2-27. Summary.............................................. 2-13 APPENDIX A - PROJECT DESCRIPTION ...................................... A-1 APPENDIX B - MAP OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 AND TAX INCREMENT FINANCING DISTRICT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. B-1 APPENDIX C - DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. .. C-1 APPENDIX D - ESTIMATED CASH FLOW FOR THE DISTRICT. . . . . . . . . . . . . . . . . . . .. D-1 APPENDIX E - MINNESOTA BUSINESS ASSISTANCE FORM ..................... E-1 APPENDIX F - FINDINGS INCLUDING BUT/FOR QUALIFICATIONS. . . . . . . . . . . . . . . .. F-1 . . . SECTION I - MODIFICA TION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1 Foreword The following text represents a Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. L This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for Central Monticello Redevelopment Project No. L Generally, the substantive changes include the establislunent of Tax Increment Financing District No. 1-38. For further information, a review of the Redevelopment Plan for Central Monticello Redevelopment Project No. I is recommended. It is available from the HRA Director at the City of Monticello. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Central Monticello Redevelopment Project No. L Monticello HRA Modification to the Redevelopment Plan for Centra] Monticello Redevelopment Project No.1 1.1 . SECTION /1- TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 1-38 Subsection 2-1. Foreword The Monticello Housing and Redevelopment Authority (the "HRA"), the City of Monticello (the "City"), staff and consultants have prepared the following information to expedite the establishment of Tax Increment Financing District No. 1-38 (the "District"), an economic development tax increment financing district, located in Central Monticello Redevelopment Project No. I. Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District No. t-38 2-1 Subsection 2-2. Statutory Authority Within the City, . there exist areas where public involvement is necessary to cause development. or redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota Statutes ("MS. '~, Sections 469.001 to 469.047, inclusive, as amended, and MS., Sections 469.174 to 469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIP Plan") for the District. Other relevant information is contained in the Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. 1. Subsection 2-3. Statement of Objectives . The District currently consists of one parcel ofland and adjacent and internal rights-of-way. The District is being created to facilitate the construction of an approximately 10, 240 square foot production/warehouse facility in the City of Monticello. Please see Appendix A for further project information. Contracts for this have not been entered into at the time of preparation of this TIF Plan, but development is likely to occur in 2007. This TlF Plan is expected to achieve many of the objectives outlined in the Redevelopment Plan for Central Monticello Redevelopment Project No. I. The activities contemplated in the Modification to the Redevelopment Plan and the TIP Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Central Monticello Redevelopment Project No.1 and the District. Subsection 2-4. Redevelopment Plan Overview 1. Property to be Acquired - Selected property located within the District may be acquired by the HRA or City and is further described in this TIF Plan. 2. Relocation - Relocation seivices, to the extent required by law, are available pursuant to MS., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the HRA or City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. . . Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information on the location of the District. The HRA or City currently owns the property to be included in the District. Subsection 2-6. Classification of the District The HRA and City, in determining the need to create a tax increment financing district in accordance with MS., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is an economic development district pursuant to MS, Section 469.174, Subd 12 as defined below: Monticello HRA Tax Increment Financing Plan for Tax IncTement Financing District No. 1-38 2-2 "Economic development district" means a type of tax increment financing district which consists of any project, or portions of a project, which the authority finds to be in the public interest because: (1) it will discourage commerce, industry, or manufacturingfrom moving their operations to another state or municipality; or (2) it will result in increased employment in the state; or (3) it will result in preservation and enhancement of the tax base of the state. The District is in the public interest because it will meet the statutory requirement from clauses 2 and 3. . Pursuant to MS, Section 469.176, Subd 4c, revenue derived from tax increment from an economic development district may not be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a purpose other than: (I) The manufacturing or production of tangible personal property, including processing resulting in the change in condition of the property; (2) Warehousing, storage, and distribution of tangible personal property, excluding retail sales; (3) Research and development related to the activities listed in items (I) or (2); (4) Telemarketing if that activity is the exclusive use of the property; (5) Tourism facilities; or (6) Qualified border retail facilities; (7) Space necessary for and related to the activities listed in items (I) to (6) In meeting the statutory criteria the HRA and City rely on the following facts and findings: The facilities in the District meet the conditions of Purposes 1,2, and 7. The District is being created to assist in the construction of a production/warehouse facility for WRE, LLC, for producing and distributing in-store display equipment. Pursuant to MS, Sections 469.176 Subd. 7, the District does not contain any parcel or part ofa parcel that qualified under the provisions of MS, Sections 273.111 or 273.112 or Chapter 473H for taxes payable in any of the five calendar years before the filing of the request for certification of the District. . . Subsection 2-7. Duration of the District Pursuant to M.S, Section 469.175, SlIbd. 1, and M.S, Section 469.176, SlIbd. 1, the duration of the District must be indicated within the TIF Plan. Pursuant to M.S, Section 469.176, SlIbd. 1b, the duration of the District will be 8 years after receipt of the first increment by the HRA or City. The date of receipt by the City of the first tax increment is expected to be 2009. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2017, or when the TIF Plan is satisfied. If increment is received in 2008, the term of the District will be 2016. The HRA or City reserves the right to decertifY the District prior to the legally required date. Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Valuellncrement and Notification of Prior Planned Improvements Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 2.3 Pursuantto M.S, Section 469.174, SlIbd. 7 and M.S., Section 469.177, SlIbd. 1, the Original Net Tax Capacity (ONTC) as certified for the District will be based on the market values placed on the property by the assessor in 2006 for taxes payable 2007. Pursuant to M.S, Section 469.177, SlIbds. 1 and 2, the County Auditor shall certifY in each year (beginning in the payment year 2008) the amount by which the original value has increased or decreased as a result of: . I. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments, negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates; or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity (NTC) value ofthe District declines below the ONTC, no value will be captured and no tax increment will be payable to the HRA or City. The original local tax rate for the District will be the local tax rate for taxes payable 2007, assuming the request for certification is made before June 30,2007. The ONTC and the Original Local Tax Rate for the District appear in the table below. Pursuant to M.S, Section 469.174 SlIbd. 4 and M.S., Section 469.177, SlIbd. 1, 2, and 4, the estimated Captured Net Tax Capacity (CTC) of the District, within Central Monticello Redevelopment Project No.1, upon completion of the project, will annually approximate tax increment revenues as shown in the table below. The HRA and City request 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures, beginning in the tax year payable 2008. The Project Tax Capacity (PTC) listed is an estimate of values when the project is completed. . . Project Estimated Tax Capacity upon Completion (PTC) Original Estimated Net Tax Capacity (ONTC) Estimated Captured Tax Capacity (CTC) $12,660 $739 $11,921 1.10297 $13,149 Pay 2006 Original Local Tax Rate Estimated Annual Tax Increment (CTC x Local Tax Rate) Percent Retained by the HRA 100% Pursuant to MS, Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to MS., Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which building pennits have been issued during the eighteen (18) months immediately preceding approval of the TlF Plan by the municipality pursuant to MS., Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. Monticello HRA Tax [ncrement Financing Plan for Tax Increment financing District No. 1-38 2.4 The City of Monticello is reviewing the area to be included in the District to determine if any building permits have been issued during the 18 months immediately preceding approval ofthe TIF Plan by the City. Subsection 2-9. Sources of Revenue/Bonded Indebtedness . Land acquisition, utilities, streets and sidewalks, and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection oftax increments. The HRA or City reserves the right to use other sources of revenue legally applicable to the HRA or City and the TlF PIau, including, but not limited to, special assessments, general property taxes, state aid for road maintenance and construction, proceeds from the sale ofland, other contributions from the developer and investment income, to pay for the estimated public costs. The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TlF Plan. As presently proposed, the project will be financed by an interfund loan. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness, including a general obligation (GO) TlF bond, or other indebtedness related to the use of tax increment financing will not exceed $160,000 without a modification to the TlF Plan pursuant to applicable statutory requirements. It is estimated that $160,000 in interfund loans will be financed with tax increment revenues. This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The HRA or City may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a developer. The estimated sources of funds for the District are contained in the following table. . . SOURCES OF FUNDS TOTAL $120,000 $120,000 $160,000 Tax Increment PROJECT REVENUES Interfund Loans The other financing sources list above is included for purposes of OSA reporting for the TIF District. It is not intended to be cumulative. Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate construction of a production/warehouse facility in the City of Monticello. The HRA and City have determined that it will be necessary to provide assistance to the project for certain costs. The HRA has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District, this TIF Plan authorizes the use oftax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. Monticello HR.A. Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 2-5 USES OF FUNDS TOTAL Land/Building Acquisition $53,000 . Site ImprovementslPreparation $5,000 Public Utilities $5,000 Streets and Sidewalks $5,000 Interest $40,000 Administrative Costs (up to 10%) $12,000 PROJECT COSTS TOTAL $120,000 Interfund Loans $160,000 The other financing uses listed above is included for purposes of OS A reporting for the TIF District. It is not intended to be cumulative. TIF is expected to be used for the project costs listed above, which is a not-to- exceed budget rather than an expected budget of costs. Pursuant to MS.. Section 469.175, Subd. 1 (5), it is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments, will equal $120,000. For purposes of OSA reporting forms, it is estimated that the cost of improvements, including financing which will be paid for with tax increment will equal $280,000 as is presented in the previous budget. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to MS., Section 469.1763, Subd. 2, no more than 20 percent ofthe tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within . . the boundaries of Central Monticello Redevelopment Project No. I, (including administrative costs, which are considered to be spent outside of the District) subject to the limitations as described in this T1F Plan. Subsection 2-11. Business Subsidies Pursuant to MS Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered a business subsidy: (1) (2) (3) (4) (5) (6) (7) (8) (9) . (10) (11) (12) (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) A business subsidy ofless than $25,000; Assistance that is generally available to all businesses or to a general class of similar businesses, such as a line of business, size, location, or similar general criteria; Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; Redevelopment property polluted by contaminants as defined in MS, Section 116J.552, Subd. 3; Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts, provided that the assistance is equal to or less than 50% of the total cost; Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; Assistance for housing; Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under MS, Section 469.174, Subd. 23; Assistance for energy conservation; Tax reductions resulting from conformity with federal tax law; Workers' compensation and unemployment compensation; Benefits derived from regulation; Indirect benefits derived from assistance to educational institutions; Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986, as amended through December 31, 1999; Assistance for a collaboration between a Minnesota higher education institution and a business; Assistance for a tax increment financing soils condition district as defined under MS, Section 469.174, SuM 19; Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; General changes in tax increment financing law and other general tax law changes of a principally technical nature. Federal assistance until the assistance has been repaid to, and reinvested by, the state or local government agency; Funds from dock and wharf bonds issued by a seaway port authority; Business loans and loan guarantees of $75,000 or less; and Federal loan funds provided through the United States Department of Commerce, Economic Development Administration. The HRA will comply with MS., Section 116J.993 to 116J.995 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. . Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1.38 2-6 . Subsection 2-12. County Road Costs Pursuant to MS., Section 469.175, Subd. 1 G, the county board may require the HRA or City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will, in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads, it must notify the HRA or City within forty- five days of receipt of this TlF Plan. In the opinion of the HRA and City and consultants, the proposed development outlined in this T1F Plan will have little or no impact upon county roads, therefore the TlF Plan was not forwarded to the county 45 days prior to the public hearing. The HRA and City. are aware that the county could claim that tax increment should be used for county roads, even after the public hearing. Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the T1F Plan would occur without the creation ofthe District. However, the HRA or City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the "but for" test was not met: Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 2-7 IMPACT ON TAX BASE . Wright County City of Monticello Monticello ISD No. 882 2005/2006 Total Net Tax CaDacitv 108,917,968 13,935,442 21,337,400 Estimated Captured Tax Capacity (CTC) Upon Completion II,921 11,921 II,921 Percent of CTC to Entitv Total 0.0001% 0.0009% 0.0559% IMPACT ON TAX RATES Estimated 2006 Percent Potential Extension Rates of Total CTC Taxes Wright County 0.325670 29.53% II,921 3,882 City of Monticello 0.510280 46.26% II,921 6,083 Monticello ISD No. 882 0243720 22.10% II,921 2,905 Other 0.023300 2.II% 11.921 278 Total I.I 02970 100.00% 13,149 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the Pay 2006 rate. The total net capacity for the entities listed above are based on Pay 2006 figures. The District will be certified under the actual Pay 2007 rates, which were unavailable at the time this TIF Plan was prepared. . . Pursuant to iviS Section 469.175 Subd. 2(bj: (I) It is estimated that the total amount of tax increment that will be generated over the life ofthe District is $120,000; (2) An impact of the District on police protection is expected. The City currently contracts with the Wright County Sheriff's Office for police services. The Wright County Sheriff's Office does track all calls for service including property-type calls and crimes. With any addition of new residents or businesses, police calls for service will be increased. New developments add an increase in traffic, and additional overall demands to the call load. The City does not expect that the proposed development, in and of itself, will necessitate new capital investment in vehicles or require that the City expand its contract with Wright County. The probable impact of the District on fire protection is not expected to be significant. Typically new buildings generate few calls, if any, and are of superior construction. All new commercial properties should be sprinkled for public safety. As the City grows, so must the fire department to provide protection for owners, employee's and the people that live and travel through Monticello. Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District >-ro. 1-38 2-8 . The impact of the District on public infrastructure is expected to be minimal. The development is not expected to significantly impact any traffic movements in the area. The current infrastructure for sanitary sewer, storm sewer and water will be able to handle the additional volume generated from the proposed development. Based on the development plans, there are no additional costs associated with street maintenance, sweeping, plowing, lighting and sidewalks. However, lighting operating costs are yet to be determined. The development in the District is expected to contribute an estimated $12,865 in sanitary sewer (SAC) and water (WAC) connection fees. The probable impact of borrowing costs is expected to be minimal. It is not anticipated that there will be any general obligation debt issued in relation to this project, therefore there will be no impact on the City's ability to issue future debt or on the City's debt limit. (3) It is estimated that the amount of tax increments over the life ofthe District that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same is $26,145 ($2,905 x 9); (4) It is estimated that the amount of tax increments over the life of the District that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is $34,938 ($3,882 x 9); (5) No requests for additional information from the county or school district regarding the proposed development for the District were received. Subsection 2-14. Supporting Documentation Pursuant to MS Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in MS Section 469.175 Subd 3, clause (bj(2j and the findings are required in the resolution approving the District. Following is a list of reports and studies on file at the City that support the Authority's findings: . City Staff Reports HRA minutes regarding the Otter Creek Business Park Development. . Subsection 2-15. Definition of Tax Increment Revenues Pursuant to MS, Section 469.174, Subd 25, tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: I, Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under MS, Section 469.177; 2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; 4. Interest or other .investment earnings on or from tax increments; 5. Repayments or return of tax increments made to the Authority under agreements for districts for which the request for certification was made after August I, 1993; and 6. The market value homestead credit paid to the Authority under MS, Section 273.1384. Subsection 2-16. Modifications to the District In accordance with MS, Section 469.175, Subd 4, any: 1. 2. 3. . 4. 5. 6. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the requirements of MS, Section 469.175, Subd 4(e); Increase in amount of bonded indebtedness to be incurred; A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan; Increase in the portion of the captured net tax capacity to be retained by the HRA or City; Increase in the estimate of the cost of the project, including administrative expenses, that will be paid or financed with tax increment from the District; or Designation of additional property to be acquired by the HRA or City, Monticello HRA Tax Increment Financing Plan forTax Increment Financing District No. 1-38 2.9 shall be approved upon the notice and after the discussion, public hearing and findings required for approval of the original TIF Plan. Pursuant to MS., Section 469.175 Subd 4(f), the geographic area of the District may be reduced, but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If an economic development district is enlarged, the reasons and supporting facts for the determination that the addition to the district meets the criteria of MS, Section 469.174, Subd. 12 must be documented in writing and retained. The requirements of this paragraph do not apply if (1) the only modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the parcel( s) eliminated from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that, notwithstanding MS, Section 469.177, Subd 1, the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the District. The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. . . Subsection 2-17. Administrative Expenses In accordance with MS. Section 469.174, Subd. 14, administrative expenses means all expenditures of the HRA or City. other than: I. Amounts paid for the purchase of/and; 2. Amounts paid to contractors or others providing materials and services, including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project; or 4. Amounts used to pay principal or interest on, fund a reserve for, Dr sell at a discount bonds issued pursuant to MS., Section 469.178; or 5. Amounts used to pay other financial obligations to the extent those obligations were used to fInance costs described in clauses (I) to (3). For districts for which the request for certifIcation were made before August I, 1979, or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel, fIscal consultants, and planning or economic development consultants. Pursuant to MS., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defIned by MS, Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Monticello HRA Tax (ncrement Financing Plan for Tax Increment Financing District No. 1~38 2.10 . Pursuant to MS, Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to MS, Section 469.177, Subd. 11, the County Treasurer shall deduct an amount (currently .36 percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment fInancing information and the cost of examining and auditing authorities' use of tax increment fInancing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-18. Limitation of Increment The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund Dr other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to MS, Section 469.176, Subd. 6: if, after Jour years from the date oj certification oj the original net tax capacity of the ta< increment financing district pursuant to MS, Section 469.177, no demolition, rehabilitation or renovation oj property or other site preparation, including qualified improvement oj a street adjacent to a parcel but not installation oj utility service including sewer or water systems. has been commenced on a parcel located within a ta< incrementfinancingdistrict by the authority or by the owner of the parcel . in accordance with the ta< increment financing plan, no additional tax increment may be taken from . that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certifY to the county auditor that the activity has commenced and the county auditor shall certifY the net tax capacity thereof as most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by Febmary 1 of the fifth year following the year in which the parcel was certified as included in the district. For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and (3) substantial reconstmction or rebuilding of an existing street. The HRA or City or a property owner must improve parcels within the District by approximately April, 20 II and report such actions to the County Auditor. Subsection 2-19. Use of Tax Increment The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: I. 2. . 3. 4. 5. 6. 7. . To pay the principal of and interest on bonds issued to finance a project; to finance, or otherwise pay public redevelopment costs of Central Monticello Redevelopment Project No. I pursuant to the MS, Sections 469.001 to 469.047; To pay for project costs as identified in the budget set forth in the TlF Plan; To fmance, or otherwise pay for other purposes as provided in MS, Section 469.176, Subd. 4; To pay principal and interest on any loans, advances or other payments made to or on behalf of the HRA or City or for the benefit of Central Monticello Redevelopment Project No. I by a developer; To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TlF Plan or pursuant to MS, Chapter 462C. MS, Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to MS, Chapter 462C, MS., Sections 469.152 through 469.165, and/or MS., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.s., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Wright County to the HRA for the Tax Increment Fund of said District. The HRA or City will pay to the developer(s) annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation, site preparation, and administration. Remaining increment funds will be used for HRA or City administration (up to 10 percent) and the costs of public improvement activities outside the District. Subsection 2-20. Excess Increments Excess increments, as defined in M.s., Section 469.176, Subd. 2, shall be used only to do one or more of the following: Monticello HRA Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 2-11 . . . I. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment ofany outstanding bonds; or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. The HRA or City must spend or return the excess increments under paragraph ( c) within nine months after the end of the year. In addition, the HRA or City may, subject to the limitations set forth herein, choose to modify the TIF Plan in order to finance additional public costs in Central Monticello Redevelopment Project No. I or the District Subsection 2-21. Requirements for Agreements with the Developer The HRA or City will review any proposal for private development to determine its conformance with the Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the development with City plans and ordinances. The HRA or City may also use the Agreements to address other issues related to the development Pursuant to MS., Section 469.176, Subd 5, no more than 10 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result of acquisition with the proceeds of bonds issued pursuant to MS., Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of I 0 percent of the acreage, the HRA or City concluded an agreement for the development of the property acquired and which provides recourse for the HRA or City should the development not be completed. Subsection 2-22. Assessment Agreements Pursuant to MS., Section 469.177, Subd 8, the HRA or City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land upon which the improvements are to be constructed and, so long as the minimum market value contained in the assessment agreement appears, in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the minimum market value agreement Subsection 2-23. Administration of the District Administration of the District will be handled by the HRA Director. Subsection 2-24. Annual Disclosure Requirements Pursuant to MS.. Section 469.175, Subd 5, 6, and 6b the HRA or City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor on or before August I of each year. MS, Section 469.175, Subd 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August] 5. Monticello HRA Tax lncrement Financing Plan for Tax Increment Financing District No. 1-33 2-12 . Jfthe City fails to make a disclosure or submit a report containing the information required by i.IS, Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-25. Reasonable Expectations As required by the TlF Act, in establishing the District, the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and thatthe increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value ofthe projected tax increments for the maximum duration of the District permitted by the TlF Plan. In making said determination, reliance has been placed upon written representation made by the developer to such effects and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix D, and indicates that the increase in estimated market value ofthe proposed development (less the indicated subtractions) exceeds the estimated market value ofthe site absent the establishment ofthe District and the use of tax increments. Subsection 2-26. Other Limitations on the Use of Tax Increment . I. General Limitations. All revenue derived from tax increment shall be used in accordance with the TlF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of Central Monticello Redevelopment Project No. I pursuant to the MS, Sections 469.001 to 469.047. Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the state or federal government. This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. Monticello HRA Tax (ncrement Financing Plan for Tax Increment Financing District No. [.38 2.13 2. Poolinl! Limitations. At least 80 percent of tax increments from the District must be expended on activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 20 percent of said tax increments may be expended, through a development fund or otherwise, on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they were solely for activities outside ofthe District. 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule set forth in MS, Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 80 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in MS, Section 469.1763, Subd. 5. Subsection 2-27. Summary The Monticello Housing and Redevelopment Authority is establishing the District to preserve and enhance . the tax base, and provide employment opportunities in the City. The TIF Plan for the District was prepared . . . by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-8500. Monticello HRA Tax. Increment Financing Plan for Tax Increment Financing District-No. 1-38 2.14 APPENDIX A-I . APPENDIX A PROJECT DESCRIPTION The HRA will be selling 5.82 acres ofland to a local company, WRE, LLC, relocating from another city for a better location. The 10,240 square foot produclion/warehouse facility will be built by the end of2007. The assistance is in the form of a write down of land, site improvements and preparation, public utilities, and streets. The value of the building and land is estimated at $760,000. The company will pay $0.67 per square foot for land for 1.5 acres at closing. An additional 4.32 acres will be conveyed to the company at no additional cost. . . . . . APPENDIX APPENDIX B MAP OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. AND TAX INCREMENT FINANCING DISTRICT NO. 1-38 B-1 . r' 'I I.r! QO 0.... o~ J/r Ii -j ~ ~ 0 ~E-o i! Ii . ~o .... ~z ..II 0 ~E-o ~r.n u~ Z ~u ....z ~ E-o E-o~ E-oZ U Z""":l z.... ;l 00 0::; ::;g: ::; >o~ E-o r.n ~E-o r.,E-o .... oz Q ~Z ~ ~~ >00 E-o::; E-oo Z z~ ....u .... UE-o U ~o Z u~ == ~ ~ ~ Z ~ .... ~ ~ ~ Q ~ E-o ~ . Z ~ ~ ::; ~ ~ U Z .... ~ ~ E-o ~ t . ~ o . I ~ i . . i I I ~ . . . APPENDIX C DESCRlPTION OF PROPERTY TO BE INCLUDED IN THE DISTRlCT The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the parcel listed below. Parcel Number Leeal Descriution Owner 155-194-001020 Lot 2, Block I, Otter Creek Crossing 3"' Addition, City of Monticello according to the recorded plat thereof, Wright County, Minnesota ~~ . . APPENDIX C-l . . . 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" ~ . . ~ M . ~ " E .~ " . ~ g " " ~ Z mmOO~~NNMMVV~~~m~~ OO~~~~~~~~~~~~~~~~ 000000000000000000 NNNNNNNNNNNNNNNNNN ~~~N~M~v~~~mm~mro~m 6 . ~ ~ ~ ~ 0 ~ ~ ~~ON~~~roNmvvm~ovvv mO~NooMONroOroNvv~~N MmvN~Nvmv~roNwromm~m ~o~ci~m~~~~roN~ro~~~ci ~~NNNMMvvvmmmwm~~ ~~~~~~~~~~~~~~~~~~ wmmmmmmmmmmmmmmmmm NNNNNNNNNNNNNNNNNN mm~~~m00~0~m00~ww~ ~~~~~~~~~~~~~~~~~~~~ ~~~~e~~~~~~~~~~~~ID ..~ m m m ~ ~ ~ m m m C""i ri (") 10 CD r.D 0:0 <D r-- r-- r-- ,.... r-- m m 0'1 m en ri ri ri M M '" ~ m '" ~ ~ ~ 000 <f!. ~ ~ ~ ~ ~ 0 0 0 0 " o ,~ ;::. ;::. ;::. ;::. ;::. ;::. ;::. ;::. ;::. " \is '" '" m m '" '" m m '" > '" '" '" '" '" '" '" '" '" .~ .,;11) . '! ,a.i ,., ~), B > '... " ."0 ~.~ 0 . ..i-"" . \:.- ~ '" '" '" '" '" '" '" '" '" '" .'?& , w ~ ~ ~ ~ M M M ~ M e to to to to to to to to to JI., ~ c . ~= . ;~~ " 0 ~ : :'1: < 0 0 0 0 0 0 0 0 0 '.i: ~ v :; :; v v :; :; v v it . . . '" '" '" '" '" '" '" '" '" ,. w ~ Ill." ~ 0 1i'~' 0 0 " N ~?,t . in ti~L . . . ~ ):),0' ~ " "' " " "' " " " " ;~l;' 0 0 0 0 0 0 0 0 0 ;? ;? 0 ;? ;? ;? 0 ;? ;? ;~)~ c"., . . . APPENDIX E MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) APPENDIX E-l ~Sl. .v yD.,."""'.....,'"."" t! .. _EconomiC lJeYeIopamt lJlJlesota _ Please fill in date agreement signed (same as question 21) . Minnesota Business Assistance Form · The Minnesota Business Assistance Form (MBAF) online is available at w\vw.deed.state.mn.usiCommunit\'/subsidies/MBAFFonn.hrm to report each business subsidy (including Job Opportunity Zone (JOBZ) tax exemptions/credit) and financial assistance agreement signed from AUf!ust 1.1999 throllf!h December 31.2005 unless goals have been achieved and reported on a MBAF per Minn. Stat. ljl 161.993 to S 1161.995. · Assistance given to a business located in a JOBZone must report annually until December 31, 2015 even if goals have been achieved. · The following government agencies must submit a MBAF: 1) any local government/agency that signed a business subsidy agreement since January 1, 2000, or represents a population of more than 2,500; 2) ail state government agencies authorized to provide business subsidies. · DEED will contact any local or state government agency that is required to report but has not done so by April I. Business assistance may not be awarded after June 1 of each year until a report has been submitted. · Questions? Call (651) 296-0580. Information on where to mail or fax your completed MBAF(s) is on page 7. Section 1: Grantor Information I. Name of grantor (funding entity) 2. Name of person completing this form 3. Street address 4. City 5. Zip Code 6. County 7. Phone number 8. Fax number 9. E-mail address 10. Please indicate who in your organization should receive the MBAF if different from the person in Question 2. NamelTitle Phone number Street address City Zip Code 16. Does the recipient have a parent corporation? (Mark one.) Street address Ci State ZIP Code 11. Classification of grantor (Mark one. If grantor is entity created by gov 't agency. please indicate affiliation. For example, a city EDA would check "City government. '') 12. Has your organization held a public hearing on and adopted criteria for awarding business subsidies in compliance with Minn. Stat. lj 1161.9941 (Mark one.) o City government o Yes, in 2006 (attach criteria) DYes, in 2006 but have not yet adopted criteria o Yes, prior to 2006 o County government o Regional government lfYes: Hearing Date: Year Criteria Submitted; o State government o No o Other (Please specify) 0 Other (Please attach ex lanation. 13. Has your organization signed any agreements to award a business subsidy or financial assistance from August], 1999 through December 31, 2005 unless goals have been achieved and reported in a previously filed MBAF? (Mark one.) DYes (Complete the remainder of the fonn unless goals have been achieved and re ortedina revious{ lledMBAF erMinn. Stat. ffl/6J.993 and //6J.994. o NO(StOD here go to section 5 on page 4.) Section 2: Red ient Information ]4. Name of business or organization receiving subsidy or financial assistance ] 5. Address where business subsidy or financial assistance will be used DYes (Indicate name and address of parent corporation below. If more than one, indicate ultimate owner.) o No Name of arent co oration Street address Ci State zrp Code Minnesota Business Assistance Fonn (12/9105) Page I of7 Dept. of Employment and Economic Development 17. Industry ofreciplent's facility (Mark one.): o rvranufacturing 0 Serv'ices 0 Finance, fnsurance, Real Estate o Retail Trade 0 Wholesale Trade 0 Construction 18. Did the recipient relocate as a result of signing this agreement? (iHark one.) o Other DYes (Indicate city and state of previous address and reason recipient did not comp/ere this project ar that address.) City/State of previous address Reason project not completed at previous address # Indicate total number of employees who ceased to be employed by recipient when the recipient relocated [0 become eligible for the business subsidy_ o No (Go ro uestion 19.) 19. \\'hat would recipient have done without business subsidy or financial assistance? (Ai/ark one): o Remain at previous location, but not expand 0 Remain at previous location but expand at the location o Relocate to different Minnesota location 0 Relocated outside Minnesota o Other 19A. Was the ro'ectaresultofeminentdomain? DYes DNo Section 3: A reement Information 20. Total dollar value of business subsidy or financial assistance (Please separate value by type in Questions 24 and 25.) (Enter zero for JOBZ, Biozone and Agzone projects,) 21. Date agreement signed (In addition to the agreement date, indicate any dates rhe agreement was amended) 22. Benefit date (Indicate the date the recipient receives the business subsidy or improvements were finished. equipmenr was placed into service, or the recipient occupied the property, whichever is earlier.) 23. Does the agreement provide a business subsidy or one of the four types of financial assistance (see Question 25) required to be reported? (Mark one.) o business subsidv 24. ffthe agreement provided a business subsidy, please indicate the type(s) and total dollar value for each type. o not applicable, agreement provided financial assistance o loan (only principal) o grant (i.e., forgivable loan) o tax abatement o TIF or other tax reduction or deferral * o guarantee or payment o contribution of property or infrastructure o preferential use of governmental facilities o land contribution o Biozone o JOBl (state tax exemptionsJcredits and sales tax) o JOBZ - Agzone o other (Specify subsidy type.) $- $- $- $- $- $ $- $- $~ $~ $ 0 $ ote: no dollar value for zone ro 'ects 26. If the assistance included tax increment financing, please indicate the type ofTIF district? (Mark one.) o not applicable, assistance was not in the form ofTIF o redevelopment o renewal and renovation o soils condition o economic development o mined underground space o hazardous substance subdistrict o financial assistance 25. If the assistance was one of the four types of financial assistance, please indicate the rype(s). o not applicable, agreement provided a business subsidy o assistance for property by contaminants o assistance for renovating building stock or bringing it up to code, and assist.:'1nce provided for designated historic preservation districts, when 50 percent or less of total cost o assistance for pollution control or abatement o assistance for a TIF soils condition district $ $ $ $ 27. Are any other grantors providing a business subsidy or financial assistance to the same project? (A/ark one.) o Yes (Specify each grantor and the value oltheir assistance below; attach an additional sheet if necessary. Grantor Value ($) Grantor Value ($) DNa Minnesota Business Assistance Form (12/9/05) *For questions about TIF reporting requirements contact Arlin Waehi (651) 296-7676 at the Minnesota Office of the Stare Auditor. Dept. of Employment and Economic Development Page 20f7 Section JZ; JOZ Information Complete Questions 121-125 if the financial assistance was awarded to a 1082 qualified business recipient receiving JOB2 benefits. (If not, go directly to Question 28.) 12 I. What was the amount of private capital investment of the business in the 10Bl zone prior to December 31, 2005? Real (land and buildings) S Personal (equipment) $ 122. What amount of the qualified business's January 2, 2005 taxable market value was exempt from property taxes payable in 2006 due to 10B2 qualification'? (Please spec(fy each parcel identification number and exempt value oj each parcel, attaching an additional sheet if necessary. Obtain exempt values from the county assessor's office.) S for Parcel Identification Number: 123. \Vhat was the value of Wind Energy Production Tax, if any, for the JOBZ qualified business that was operating during the period of January I, 2005 and December 31, 2005? $ 124/J25: Goals and actual performance for the JOB2 qualified business recipient Did the qualified business paid compensation including benefits to each employee of at least 110 percent of the federal poverty level for a family of four for each year ($10.23 per hour as ofJuly 1, 2005)? DYes DNo (For JOBZ subsidy agreements signed after June 30,2005, compensation including benefJts paid by a qualifie~ business to each employee on an annualized basis must be at least 110 percent of the federal poverty level for a family offour for each year.) Each line represents an hourly wage level, please round wage levels to the nearest whole dollar and specify the hourly benefit for each wage level and the number of jobs (i.e., $12.00 hourly wage level, S1.20 hourly benefits and 10 jobs). JZ4. Goals Full-time Hourly Wage Level $ 7.00 $ 8.00 $ 9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 S23.00 S24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher Hourly Benefits Number of Jobs Minnesota Business Assistance Fonn (12/9/05) JZ5. Actual, Full-time Hourly Wage Level $ 7.00 $ 8.00 $ 9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher Page 3 of7 Hourly Benefits Number of Jobs Depl. of Employment and Economic: Development JZ4lJZ5 (continues) Part-time Hourly Wage Level $ 7.00 $ 8.00 $ 9.00 $10.00 $11.00 $]2.00 $13.00 $14.00 $]5.00 $16.00 $17.00 $]8.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher Job Retention Hourly Wage Level $ 7.00 $ 8.00 $ 9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $]9.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher . Hourly Benefits Hourly Benefits Minnesota Business Assistance Form (] 2/9/05) Number of Jobs Number of Jobs Part-time Hourly Wage level $ 7.00 $ 8.00 $ 900 $10.00 $] 1.00 $12.00 $13.00 $]4.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher Job Retention Hourly Wage Level $ 7.00 $ 8.00 $ 9.00 $10.00 $11.00 $12.00 $]3.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00 $26.00 $27.00 $28.00 $29.00 $30.00 $31.00 and higher Page 4 or 7 Hourly Benefits Hourly Benefits Number of Jobs Number of Jobs Dept. of Employment and Economic Development Section 4; Coals and Public Pur ose Identified in the A reement 28. Minn. Stat. S 1161. 994 requires that business subsidy and financial assistance agreements state a public purpose. Which of the following public purposes were stated in the agreement? (Mark all that apply-) o Enhancing economic diversity o Creating high-quality job gro\l;1h o Job retention o Stabilizing the community o Increasing tax base (cannot be only purpose) o Other (please specify) 29. Indicate whether the agreement included the following types of goals, and whether the recipient had attained those goals at the time of this report. (Fill in {he boxes and attainment daters} for each goal.) A) Specific wage and job goals to be attained within 2 years Goals Target attainment All goals established? dates (month & year) attained? DVes ONo o Yes DNo DVes ONo DVes DNo DYes ONo DYes DNo DYes DNo DYes ONo B) Other job-creation and/or retention goals C) Other wage goals D) Goals other than wage and job goals (Please auach descri lion 0 ress toward attainment i not documented in uestions 30 and 31.) 30. If you answered questions JZ4~JZ5 for a qualified business go- directly to question 32. For each of the following wage categories, indicate the job creation and/or retention goals stated in the agreement and the average hourly value of any employer-provided benefits goals for those jobs. (Onlv indicate job creation goals infull-time equivalents if you are unable to separate goals by full- and part-time positions.) Uyou answered questions JZ4-JZ5 for a qualified business go directly to question 32. Hourly Wage (excluding benefits) Fun-time Job Creation Part-time Job Creation Job Retention Hourly Value of Benefits no hourly wage-level goat $ less than $7.00 $ $7.00 to $8.99 $ $9.00 to $10.99 $ $11.0010 $12.99 $ $13.0010 $14.99 $ $15.00 to $16.99 $ $]7.0010$18.99 $ $19.00 to $20.99 $ $21.00 to $22.99 $ $23.00 to $24.99 $ $25.00 to $26.99 $ $27.0010 $28.99 $ $29.00 to $30.99 $ $31.00 and higher $ Minnesota Business Assistance Form (12/9i05) Page 50f7 Dept. of Employment and Economic Development 31. If you answered questions JZ4-JZ5 for a qualified business go directly to question 32. For each of the following wage categories, indicate the number of actuaJjobs created and/or retained since the benefit date and the actual hourly value of any employer-provided benefits for those jobs. (On/v indicate job creation in full-time equivalents if you are unable to separate job creation into fidl- and part- time positions.) If you answered questions JZ4-.JZ5 for a qualified business go directly to question 32. . Hourly Wage (excluding benefits) Fun-time Job Creation Job Retention Hourly Value of Benefits Part-time Job Creation less than $7.00 $ $7.00 to $8.99 $ $9.00 to $10.99 $ $11.00 to $12.99 $ $13.00 to $14.99 $ $15.00 to $16.99 $ $17.0010$18.99 $ $19.00 '0 $20.99 $ $21.00 to $22.99 $ $23.00 to $24.99 $ $25.00 to $26.99 $ $27.00 to $28.99 $ $29.00 to $30.99 $ $31.00 and higher $ 32. Has the recipient achieved alllloa(s (see Question 29, 30 and 3]) and fulfilled all oblie:ations stipulated in the agreement (Mark one.) DYes ONo Section 5: Recipients Failing to Fulfill Obligations (Do not comnJete this section if vou comnleted it on another lvfBAF submitted to DEED.) 33. During the period January 1,2005 through December 31, 2005, did your organization have any recipients who failed to report as required by Minn. Stat. 9116J.993 and S 116J.9947 (Mark one.) o Yes (Indicate the name of each recipient failing to report and the value of subsidy or financial assistance awarded to that recipient. Attach additional pages ifnecessary.) Name of recipient Type of subsidy or assistance (See Questions 24 & 25.) Value of subsidy or assistance ONo 34. Did your organization have any recipients who failed to achieve any goals or fulfill any other obligations under an agreement signed on or after January 1, 2005, that were required to be fulfilled by the time of this report? (Mark one.) DYes (Complete the remainder of this section.) o No (Stop here and submit form to DEED.) . Minnesota Business Assistance Form (12/9/05) Page 6 of7 Dept. of Employment and Economic Development For questions 35-39: Provide the following information for each recipient failing to fulflll goals or any other terms of an agreement that were to be attained b the time afre ortino. (Attach additional a es ifnecessarl!.) 35. Information on recipiem and agreement: Name of recipient in default Type of subsidy or assistance Initial value of subsidy or assistance Street address of recipient City/Zip code of recipient Outstanding value of subsidy or assistance 36. Reason(s) for default (A/ark at! that apply.): o recipient ceased operation o recipient relocated to a different community o recipient was unable to fill vacant positions o other (Specify reason.) 37. To date, has the recipient fulfilled its repayment obligation? (Mark one.) DYes o No, recipient has be~n to repay the assistance. o No, recipient has oot belluo to repay the assistance. 38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations? (Mark one.) DYes DNo 39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy: Return your completed MBAF(s) by Avril], 2006 Minneso-ta Business Assistance Form (12/9/05) Page 70f7 Dept. of Employment and Economic Development EITHER Mail To: Minnesota Business Assistance Report Minnesota Department of Employment and Economic Development - Analysis and Evaluation I" National Bank Building 332 Minnesota Street, Suite E200 St. Paul, Minnesota 55101-1351 OR Fax To: . (651) 215-3841 (Next year, please use the online version of this fonn. It can be found at wvo/w.deed.state.mn.us/Community/subsidies/MBAFF onTI.htm.) . . . APPENDIX F FINDINGS INCLUDlNG BUTiFOR QUALIFICATIONS Current Market Value $49,278 708.020 $658,742 73.988 $584,753 $584,753 New Market Value - Estimate Difference Present Value of Tax Increment Difference Value Likely to Occur Without TIF is Less Than: The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future: The development proposed in the TIF Plan is a production/warehouse facility that meets the City's objectives for economic development The business is moving from another city, where they currently lease space. As the business continues to grow, they wish to expand and add to their new facility. The business did look at surrounding communities and chose the City as the best location. The cost of land acquisition, site and public improvements and utilities make development of the facility in this location infeasible without City assistance. The HRA is the land developer and is charging only enough to cover its costs plus interest to build the infrastructure to support this development The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration ofTIF District No. 1-38 permitted by the TIF Plan: This site is part ofa new industrial park, with high start- up costs incurred by the HRA to acquire and grade land and install infrastructure. If the HRA sold the land at its true value, it would be unlikely to find willing buyers. The first parcel sold in this industrial park also required tax increment assistance, and the City expects that future sales will require similar incentives. Therefore, the City reasonably determines that no other development of similar scope is anticipated on this site without substantially similar assistance being provided for development To summarize this finding: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. Ifthe proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $658,742. The increase in market value would be due primarily to new construction within the District (See Appendix D and F ofTIF Plan). c. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be no more than $73,988 (See Appendix F of TlF Plan) APPENDIX F-I . . . d. Even ifsome development other than the proposed development were to occur, the Council finds that no alternative would occur that would produce a market value increase greater than $584,753 (the amount in clause b less the amount in clause c) without tax increment assistance. If the City and HRA did not assume the role ofland developer, the property would not develop in the near term. If it did develop without assistance, the likely uses would be dominated by retail, housing or other development with little or no meaningful employment. The District meets the City's objectives for retaining existing quality businesses, a mixture ofland uses, and high quality employment for its citizens. APPENDIX F-2 . . . HRA Agenda - 04/11/07 6. Public Hearin!! on the Business Subsidy A!!reement and Land Sale. PUBLIC HEARING - BUSINESS SUBSIDY AGREEMENT AND LAND SALE Business Subsidy Agreement - As the assistance to the redeveloper "WRE LLC" may exceed $100,000, the HRA must hold a public hearing according to the Minnesota Statutes, Section 1 16J.993-116J.995. The public hearing notice appeared in the local newspaper on March 29, 2007. The "Business Subsidy Agreement" can be found in Section 3.8 of the Purchase and Redevelopment Contract by and between the HRA and WRE LLC. The Agreement describes the purpose and job and wage-levels goals for the subsidy, remedies if goals are not met, and reporting requirements. Land Sale - The City of Monticello established the Housing and Redevelopment Authority (HRA) to carry out the goals and objectives within Redevelopment Plan of Central Monticello Redevelopment Project No. 01. The HRA can acquire and sale land for the purpose of economic, redevelopment, and/or housing development. However, unlike the City of Monticello, the HRA must hold a public hearing prior to sale ofland according to Minnesota Statutes. Said public hearing notice appeared in the local newspaper on March 29, 2007. On April 23, 2007, the Council will authorize conveyance of the 5.8 acres to the HRA. The rationale for the Council to deed the property to the HRA: The HRA collects and has the authority to spend tax increment. It simplifies and consolidates the land sale and negotiation process (land write-down) to one governmental entity for the benefit of the end-user. ARTICLE III of the Purchase and Redevelopment Contract outlines the conveyance, purchase price, and conditions for the conveyance of 5.8 acres to WRE LLC. AFTER OPENING THE PUBLIC HEARING FOR COMMENTS AND OUESTIONS - PLEASE CLOSE A. Consideration to adont a resolution annrovine the Purchase and Redevelonment Contract between the HRA in and for the City of Monticello and WRE. LLC. The Purchase and Redevelopment Contract by and between the HRA and WRE LLC was prepared by HRA Attorney Martha Ingram, Kennedy & Graven. The draft copy of the Contract includes a number of exhibits: legal description, quit claim deed for purpose of conveying property to WRE, LLC, an Interfund Loan for advance of certain costs in connection with TIP District No. 1-38, an Assessment Agreement, and Certification of Completion. 1 . HRA Agenda - 04/11/07 The Executive Director will review the draft copy of the Purchase and Redevelopment Contract at the meeting after comments have been made by the developer. The developer received the draft copy prior to March 1. The Contract follows the proposal made to Walker In-Store by the HRA based on the building size and market value, job creation and wage-levels, and the amount of drainage and power easements within the 5.8 acre lot. The purchase price is $43,560 for 1.5 acres or $.67 per sq ft, no additional cost for the remaining 4.3 acres which consists of easements, no assessments, and no trunk fees. The HRA will pay the trunk fees of $8,577 for the 1.5 acres at time of closing. I suggest the minimum market value for the building and land within the Assessment Agreement be $700,000 and a construction completion date of December 31,2007. As you recall, Phase I and Phase II of Otter Creek Crossing are now graded; therefore, reimbursement for general grading is no longer an issue or included in the Contract. B. Alternative Ootions: 1. Motion to adopt a resolution approving the Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and WRE LLC including the business subsidy agreement and land sale. . 2. Motion to deny adoption of the resolution approving the Purchase and Redevelopment Contract between the HRA in and for the City of Monticello and WRE LLC. 3. A motion to table any action. C. Recommendation: The City Finance Director and Executive Director recommend alternative no. 1 as the Contract is consistent with the preferred package criteria, economic development goals, and final plat for Otter Creek Crossing 3rd Addition. D. Suooortiol!: Data: Public hearing notice, resolution for adoption, and Purchase and Redevelopment Contract. 2 . . . . BRA Agenda - 04/11/07 B. Consideration to aDDrove a resolution authorizinl! Interfund Loan for Advance of certain costs in connection with TIF District No. 1-38. This resolution actually authorizes the advancement of funds (Interfund Loan) for expenditures eligible to be paid by tax increment. The HRA will reimburse itself for the land advance in the amount of $152,460 at an interest rate of 8% per annum. Interest accrues on principal amount from the date of closing. Principal and interest on the loan shall be paid semi-annually each August and February 1 beginning in 2009. The HRA previously determined the market price of the improved redevelopment property was at least $3.00 per sq ft or $196,020 for 1.5 acres. B. Alternative Action: 1. A motion to adopt a resolution authorizing Interfund Loan for advance of certain costs in connection with TIF District No. 1-38. 2. A motion to deny adoption of a resolution authorizing Interfund Loan for advance of certain costs in connection with TIF District No. 1-38. 3. A motion to table any action. C. Recommendation: Recommendation is Alternative No. I. This is more or less a housekeeping item to the previous approved HRA action. D. SUDDortinl! Data: Resolution for adoption. 3 . ,H~ tme~ AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA) ss. COUNTY OF HENNEPIN) Bruce Treichler, being duly sworn on an oath, states or affirms that he is the Publisher of the newspaper known as Monticello Times and has full knowledge of the facts which are stated below. (A) The newspaper has complied with all of the requirements constituting qualifi- cation as a qualified newspaper as provided by Minn. Stat. !} 331A.02, !}331A.07, and other applicable laws as amended. (B) The printed public notice that is attached, was cut from the columns of said newspaper, and was printed and published once each week, for one successive week(s); it was first published on Thursday, the 29 day of March , 2007, and was thereafter printed and published on every Thursday to and including Thursday, the day of 2007; and printed below is a copy of the lower case alphabet from A to Z, . both inclusive, which is hereby acknowledged as being the size and kind of type used in the composition and publication of the notice: abcdefghijk 1m nopqrstuvwxyz By: ~ C]~ Title: Publisher Subscribed and sworn to or affirmed before me on this 29 day of March , 2007. ~~~ . MARY ANN CARLSON NOTARV PUBUC- MINNESOTA MY COMMISSION EX~RES 1-.3H)9 RATE INFORMATION . Lowest classified rate paid by commercial users $ 2.85 oer line for comparable space (2) Maximum rate allowed by law for the above matter $ 6.20 oer line (3) Rate actually charged for the above matter $ 2.13oerline Message Page 1 of 1 Ollie Koropchak • From: Ingram, Martha N. [Mingram@Kennedy-Graven.com] Sent: Wednesday, April 11, 2007 3:49 PM To: Ollie Koropchak Cc: Bubul, Stephen J. Subject: Walker contract Ollie - I just got off the phone with Steve Thorson, Brian Walker's attorney. He is really pushing on two of his proposed changes: Section 3.6(b) indemnification for soils conditions, and Secti 3.9 administrative expenses. (~a~~e ~ C Section 3.6(b): Walker would like indemnification of the City and RA to take effect only after closing on the conveyance of the property, and requested that you ask the HRA to allow this. I did explain that this was a standard contract term for the Otter Creek redevelopment sites, but he was pretty adamant that WRE should not be required to indemnify the City and HRA before it owns the property. a ~- 1 `'Y Section 3.9: alker is concerned about the extent to which admin costs will exceed the $10,000 already paid. He wanted to know how often the application fee amount is exceeded and what the worst case scenario has been. I told him I was not able to answer these questions and that he should speak directly with you. It sounded like he was mainly concerned about understanding his likely maximum obligation. I told him you could raise the question of a cap with the HRA, but that it was extremely unlikely the HRA would be willing to grant a cap in this case when it has not done so for anyone else. These are the only two points that seem as though they might be sticky. Martha Ingram Kennedy & Graven, Chartered 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Phone: 612.337.9231 Fax: 612.337.9310 mingram®kennedy-~raven.com This notice is required by IRS Circulaz 230, which regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding correspondence and or any attachment is a written tax advice communication, it is not a full "covered opinion." Accordingly, this advice is not intended and cannot be used for the purpose of (1) avoiding penalties that may be imposed under the Internal Revenue Code of 1986, as amended, or (2) promoting, marketing, or recommending to another party any matters addressed herein. This message (including any attachments) is from a law firm and may contain confidential client information or an attorney- client communication that is confidential and privileged by law. The information is intended only for the use of the individual or entity to whom it is addressed. If you are not the addressee or the employee or agent responsible to deliver this a-mail to its intended recipient, please delete this message (and any attachments) without any review, distribution, or copying and notify the sender of the inadvertent transmission. • 4/11/2007 ,~,.~_;~ = ` . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO '_ RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT CONTRACT BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO AND WRE, LLC. BE IT RESOLVED by the Board of Commissioners ("Board") of the Housing and Redevelopment Authority in and for the City of Monticello ("Authority") as follows: Section 1. Recitals. 1.01. The Authority currently administers Central Monticello Redevelopment Project No. 1 (the "Project''); and has on this date approved (and recommend approval by the City of) the creation of Tax Increment Financing District No. 1-38 (the "TIF District") within the Project, all pursuantto Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179. 1.02. To facilitate redevelopment of certain property in the TIF District, and Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") between the Authority and WRE, LLC (the "Redeveloper"), under which among other things the Authority will convey certain property described as Lot 2, Block 1, Otter Creek Crossing 3rd Addition, according to the recorded plat thereof, Wright County, Minnesota (the "Redevelopment Property") to Redeveloper. 1.03. The City currently owns the Redevelopment Property and has previously authorized the conveyance of that property to the Authority in order to promote the development of the Otter Creek Crossing industrial park. 1.04. The assistance under the Contract constitutes a "business subsidy" exceeding $100,000 within the meaning of Minnesota Statutes, Section 1161.993 to 1161.995 (the "Business Subsidy Act"). 1.05. The "business subsidy agreement" as required under the Business Subsidy Act is included as one section of the Contract, and the Authority has on this date conducted a dwy noticed public hearing regarding both the sale of the Redevelopment Property to Redeveloper and the business subsidy agreement, at which all interested persons were give an opportunity to be heard. Section 2. Authority Aporoval; Further Proceedings. 2.01. The Board approves the Contract as presented to the Board, including the business subsidy agreement therein, subject to modifications that do not alter the substance of the transaction and that are approved by the Chair and Executive Director, provided that execution of the documents by the those officials shall be conclusive evidence of their approval. . . . 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority's obligations under the Contract as a whole, including without limitation execution of any deed or other documents necessary to acquire the Redevelopment Property from the City and to convey such property to Redeveloper. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello this day ofll th day of April, 2007. A TrEST: Chair Executive Director 2 . . FIRST DRAFT, February 9,2007 PURCHASE AND REDEVELOPMENT CONTRACT By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA and WRE, LLC Dated as of: ,2007 This document was drafted by: KENNEDY & GRAVEN, Chartered (MNI) 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 Telephone: 612-337-9300 . 305850vl MNI MNI90-125 -- . . . TABLE OF CONTENTS Page PREAMBLE .............................................................................................................................1 Section 1.1. Section 2.1. Section 2.2. Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 3.5. Section 3.6. Section 3.7. Section 3.8 Section 3.9 Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 5.1. Section 5.2. ARTICLE I Definitions Definitions........................................................................................................... 2 ARTICLE II Reoresentations and Warranties Representations by the Authority........................................................................ 5 Representations and Warranties by the Redeveloper.......................................... 5 ARTICLE III Acquisition and Convevance of Property Conveyance of the Property................................................................................ 7 Purchase Price; Provisions for Payment ............................................................. 7 Conditions of Conveyance.. ........... ........ ........ ............... ..................... ...... ...........7 Place of Document Execution, Delivery and Recording, Costs ......................... 8 Title..................................................................................................................... 8 Soils and Environmental Conditions .................................................................. 9 Advance of Land and Other Costs; Tax Increment Interfund Loan ................... 9 Business Subsidy Agreement............................................................................IO Payment of Administrative Costs ..................................................................... 12 ARTICLE IV Construction of Minimum Improvements Construction of Minimum Improvements ........................................................ 13 Construction Plans ............................................................................................ 13 Commencement and Completion of Construction............................................ 14 Certificate of Completion ................................................................................. 14 Drainage and Utility Easement......................................................................... 15 ARTICLE V Insurance Insurance.. ............ .......... ........ .......... ............... ........ ...... ........ ............ ................ 16 Subordination... ..... .... ..... ... ...... ............... ...... ...... ......... ..... ....... ...... ................ .... 17 305850vl MNI MNl90-125 1 . . . Section 6.1. Section 6.2. Section 6.3 Section 7.1. Section 7.2. Section 7.3. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9 Section 10.10 305850vl MNI MNl90-125 ARTICLE VI Delinquent Taxes and Review of Taxes Right to Collect Delinquent Taxes.................................................................... 18 Review of Taxes ...............................................................................................18 Assessment Agreement ....... .............. ............. ....... ..... .............. .......... ............... 18 ARTICLE VII Financing Financing... ...... ....... ...... ....... ... .......... ..................... ........ ........... ..... ........ ............ 19 Authority's Option to Cure Default on Mortgage............................................. 19 Subordination and Modification for the Benefit of Mortgagee ........................ 19 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Representation as to Redevelopment................................................................ 20 Prohibition Against Redeveloper's Transfer of Property and Assignment of Agreement ................................................................................ 20 Release and Indemnification Covenants........................................................... 21 ARTICLE IX Events of Default Events of Default Defined ................................................................................ 23 Remedies on Default......................................................................................... 23 Revesting Title in Authority Upon Happening of Event Subsequent to Conveyance to Redeveloper .............................................................................23 Resale of Reacquired Property; Disposition of Proceeds .................................25 No Remedy Exclusive....................................................................................... 25 No Additional Waiver Implied by One Waiver ................................................ 26 ARTICLE X Additional Provisions Conflict of Interests; Authority Representatives Not Individually Liable........ 27 Equal Employment Opportunity....................................................................... 27 Restrictions on Use ........................................................................................... 27 Provisions Not Merged With Deed................................................................... 27 Titles of Articles and Sections .......................................................................... 27 Notices and Demands ....................................................................................... 27 Counterparts..................... ....... ......... .......... .......... ........ ............. .......... ..... .........28 Recording .... ... ......... .... ...... ..... .......... .......... .......... ..... ...... .................... ... ... .... ....28 Amendment....................................................................................................... 28 Authority or City Approvals ............................................................................. 28 11 . . . Section 10.11 Section 10.12 Termination.. ....... ........ ......... ... .... .... ...... ......... ...... ... ... ............ ... ........... ...... ... .... 28 Choice of Law and Venue.................................................................................28 TESTIMONIUM ....................................................................................................................... S-I SIGNATURES ......................................................................................................................... S-I SCHEDULE A Redevelopment Property SCHEDULE B Form of Quit Claim Deed SCHEDULE C Plat of Redevelopment Property SCHEDULE D Resolution approving Interfund Loan SCHEDULE E Certificate of Completion SCHEDULE F Assessment Agreement SCHEDULE G Otter Creek Crossing Declaration (The remainder of this page is intentionally left blank.) 305850vl MNI MN190-125 III 1 . PURCHASE AND REDEVELOPMENT CONTRACT THIS AGREEMENT, made on or as of the _ day of ,2007, by and between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MONTICELLO, MINNESOTA, a public body corporate and politic established pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "Authority"), and WRE, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: . WHEREAS, the Authority has undertaken a program to promote economic development and job opportunities and to promote the redevelopment of land which is underutilized within the City, and in this connection created a redevelopment project known as the Central Monticello Redevelopment Project No. I (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "HRA Act"); and WHEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and . WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the "Redevelopment Property") within the Redevelopment Project, and intends to convey that property to the Redeveloper for development of certain improvements described herein; and WHEREAS, the Authority and City have approved a Tax Increment Financing Plan for Tax Increment Financing District No. 1-38 (the "TIF District") pursuant to Minnesota Statutes, Sections 469.174 to 469.1799, as amended, made up of the Redevelopment Property; and WHEREAS, the Authority believes that the redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: (The remainder of this page is intentionally left blank.) . 305850vl MNIMNl90-125 Defmitions . ARTICLE I Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authority" means the Housing and Redevelopment Authority in and for the City of Monticello, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Business Subsidy Act" means Minnesota Statutes, Section 116J.993 to 116J.995, as amended. . "Certificate of Completion" means the certification provided to the Redeveloper, or the purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of this Agreement. "City" means the City of Monticello, Minnesota. "Closing" has the meaning provided in Section 3.3(b). "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4) elevations (all sides); (5) landscape plan; and (6) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Wright, Minnesota. "Event of Default" means an action by the Redeveloper listed in Article IX of this Agreement. "Holder" means the owner of a Mortgage. . "HRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended. 305850vl MNI MN190-125 2 . . . "Interfund Loan" has the meaning provided in Section 3.7 and Schedule D. "Minimum Improvements" means the construction on the Redevelopment Property of an approximately 10,240 square foot production facility, including office space necessary for and related to such activities. "Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or in part, with the Redevelopment Property and which is a permitted encumbrance pursuant to the provisions of Article VIII of this Agreement. "Otter Creek Crossing Declaration" means the Declaration Conditions and Protections for Otter Creek Crossing filed County Recorder for Wright County, Minnesota as Document No. Schedule G. of Protective Covenants, in the Office of the , attached as "Preliminary Agreement" means the Preliminary Development Agreement between the Authority and the Redeveloper dated as of January 31, 2007. "Redeveloper" means WRE, LLC or its permitted successors and assigns. "Redevelopment Project" means the Authority's Central Minnesota Redevelopment Project No. 1. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended. "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Redevelopment Property and which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended. "Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing District No. 1-38. "Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for Tax Increment Financing District No. 1-38, as approved by the Authority on ,2007 and by the City on ,2007, and as it may be amended from time to time. 305850vl MNIMN190-125 3 . . . "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Termination Date" means the earlier of (a) date of the Authority's last receipt of Tax Increment from the TIF District in accordance with Section 469.176, subd. Ib(3) of the TIF Act, or (b) the date the Interfund Loan has been paid in full, defeased, or terminated in accordance with the terms of the resolution set forth in Schedule D. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war,terrorism, strikes, other labor troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such approval and construction is required under Sections 4.2 and 4.3 of this Agreement. (The remainder ofthis page is intentionally left blank.) 305850vl MNI MNI90.125 4 . . . ARTICLE II Representations and Warranties Section 2.1. Representations by the Authority. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a housing and redevelopment authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the Authority are undertaken to foster the redevelopment of certain real property which for a variety of reasons is presently underutilized, to prevent the emergence of blight, to create increased tax base and employment in the City, and to stimulate further development of the Otter Creek Crossing industrial park and the Redevelopment Project as a whole. (c) The Redevelopment Property is currently zoned B-A, and the Minimum Improvements conform with the permitted land uses allowed within this zoning classification. Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper represents and warrants that: (a) The Redeveloper is a limited liability company duly organized and in good standing under the laws of the State, is not in violation of any provisions of its articles of organization or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery and performance of this Agreement by proper action of its members. (b) If the Redeveloper acquires the Redevelopment Property in accordance with this Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (c) The Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Redeveloper is aware of no facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state or federal environmental law, regulation or review procedure. (d) The Redeveloper will construct the Minimum Improvements in accordance with all local, state or federal energy-conservation laws or regulations. 305850vl MNIMNI90-125 5 . . . (e) The Redeveloper will obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (f) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any partnership or company restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it is bound, or constitutes a default under any of the foregoing. (g) The proposed development by the Redeveloper hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (h) The Redeveloper is not currently in default under any business subsidy agreement with any grantor, as such terms are defined in the business Subsidy Act. (The remainder of this page is intentionally left blank.) 305850vl MNIMN190-125 6 . . . ARTICLE III Acquisition and Conveyance of Property Section 3.1. Convevance of the Property. As of the date of this Agreement, the City owns the Redevelopment Property and has agreed to transfer title to the Authority. The Authority will convey title to and possession of the Redevelopment Property to the Redeveloper, subject to all the terms and conditions of this Agreement. The parties agree and understand that this Agreement supersedes in all respects the Preliminary Agreement. Section 3.2. Purchase Price: Provisions for Payment. (a) The purchase price to be paid to the Authority by the Redeveloper in exchange for the conveyance of the Redevelopment Property is $43,560.00. The parties agree and understand the purchase price represents 65,340 square feet (1.5 acres) at a price of approximately $.67 per square foot. An additional 186,001.2 square feet (4.27 acres) shall be conveyed to the Redeveloper for no additional consideration, but subject to an easement in favor of the City for ponding and utility purposes, as described in Section 4.5. The purchase price shall be payable by the Redeveloper as follows: (i) earnest money in the amount of $10,000, receipt of which the Authority acknowledges upon execution in full of this Agreement; and (ii) the balance payable in cash or certified check at Closing. Section 3.3. Conditions of Conveyance. (a) The Authority shall convey title to and possession of the Redevelopment Property to the Redeveloper by a deed substantially in the form of the deed attached as Schedule B to this Agreement. The Authority's obligation to convey the Redevelopment Property to the Redeveloper is subject to satisfaction of the following terms and conditions: (1) The Authority having approved Construction Plans for the Minimum Improvements in accordance with Section 4.2. (2) The Authority having approved financing for construction of the Minimum Improvements in accordance with Article VII hereof, and the Redeveloper having closed on such permanent financing at or before Closing on transfer of title to the Redevelopment Property to the Redeveloper. (3) The Redeveloper having reviewed and approved (or waived objections to) title to the Redevelopment Property as set forth in Section 3.5. (4) The Redeveloper having reviewed and approved (or waived objections to) soil and environmental conditions as set forth in Section 3.6. (5) No uncured Event of Default under this Agreement. 305850vl MNI MNl90-125 7 . Conditions (1), (2), and (5) are solely for the benefit of the Authority, and may be waived by the Authority. Conditions (3) and (4) are solely for the benefit ofthe Redeveloper, and may be waived by the Redeveloper. (b) The closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper shall occur upon satisfaction of the conditions specified in this Section, but no later than , 2007 or at such earlier date as the parties hereto agree in writing ("Closing"). Section 3.4. Place of Document Execution, Delivery and Recording, Costs. (a) Unless otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all deeds, documents and the payment of any purchase price shall be made at the offices of the title company selected by Redeveloper or such other location to which the parties may agree. (b) The deed shall be in recordable form and shall be promptly recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. At Closing, the Redeveloper shall pay: recording costs for the deed (excluding state deed tax), title insurance commitment fees and premiums, if any, and title company closing fees, if any. The parties agree and understand that the Redevelopment Property is exempt from property taxes for taxes payable in 2007. (c) At Closing the Authority shall payor cause to be paid the state deed tax, costs of recording any instruments used to clear title encumbrances, all outstanding special assessments against Redevelopment Property, and all City trunk fees. The parties agree and understand that all such costs are included in the purchase price payable under Section 3.2. . Section 3.5. Title. (a) As soon as practicable after the date of this Agreement, the Redeveloper shall obtain a commitment for the issuance of a policy of title for the Redevelopment Property. The Redeveloper shall have thirty (30) days from the date of its receipt of such commitment to review the state of title to the Development Property and to provide the Authority with a list of written objections to such title. Upon receipt of the Redeveloper's list of written objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the objections made by the Redeveloper. In the event that the Authority has failed to cure objections within sixty (60) days after its receipt of the Redeveloper's list of such objections, the Redeveloper may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, or (ii) waive the objections and proceed to Closing. Upon termination, the Authority shall promptly return to the Redeveloper any earnest money. The Authority shall have no obligation to take any action to clear defects in the title to the Redevelopment Property, other than the good faith efforts described above. (b) The Authority shall take no actions to encumber title to the Redevelopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. The Authority expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to the Redevelopment Property prior to Closing. Upon Closing, the Authority is obligated to pay all costs to discharge any encumbrances to the Redevelopment . 305850vl MNIMN190-125 8 . . . Property attributable to actions of the Authority, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. (c) The Redeveloper shall take no actions to encumber title to the Redevelopment Property between the date of this Agreement and the time the deed is delivered to the Redeveloper. The Redeveloper expressly agrees that it will not cause or pennit the attachment of any mechanics, attorneys, or other liens to the Redevelopment Property prior to Closing. Notwithstanding termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to discharge any encumbrances to the Redevelopment Property attributable to actions of Redeveloper, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. Section 3.6. Soils and Environmental Conditions. (a) Before closing on conveyance of the Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter the Redevelopment Property and conduct any other environmental or soils studies deemed necessary by the Redeveloper. If, at least 10 days before Closing the Redeveloper determines that hazardous waste or other pollutants as defined under federal and state law exist on the property, or that the soils are otherwise unsuitable for construction of the Minimum Improvements, the Redeveloper may at its option terminate this Agreement by giving written notice to the Authority, upon receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, except the Authority shall promptly return to the Redeveloper any earnest money. (b) The Redeveloper acknowledges that the Authority makes no representations or warranties as to the condition of the soils on the Redevelopment Property or its fitness for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the Redevelopment Property. Section 3.7. Advance of Land and other Costs; Tax Increment Interfund Loan. (a) The Authority has determined that the fair market price of the Redevelopment Property is $196,020.00, or $3.00 per square foot. This price represents the total invested or to be invested by the Authority or City in making the Redevelopment Property available for commercial development, including the value of the raw land and all costs of special assessments for infrastructure, City trunk fees, general grading, platting, administrative and holding costs. As described in Section 3.2 hereof, the purchase price for conveyance of the Redevelopment Property represents a reduction from the fair market price of$3.00 per square foot to $43,560 for a I.5-acre portion of the Redevelopment Property. Therefore, at Closing the Authority will forgo receipt of the full market price of the Redevelopment Property, which represents an advance of Authority funds in the arnount of$152,460.00. (b) The Authority will treat the advance described in paragraph (a) as an interfund loan (the "Interfund Loan") within the meaning of Section 469.178, Subdivision 7 of the TIF Act. The total original principal amount of the Interfund Loan is $152,460.00. The terms of the Interfund Loan are described in the resolution attached as Schedule D (the "Loan Resolution"). 305850vl MNIMN190-125 9 . . . The Authority will pledge Available Tax Increment, as defined in the Loan Resolution, to payment of the Interfund Loan. The Redeveloper has no rights or interest in any Tax Increment. Section 3.8. Business Subsidv Agreement. The provisions of this Section constitute the "business subsidy agreement" for the purposes of the Business Subsidy Act. (a) General Terms. The parties agree and represent to each other as follows: (I) The subsidy provided to the Redeveloper consists of the principal amount of the Interfund Loan described in Section 3.7. The Interfund Loan is payable from a portion of the Tax Increments from the TIP District, an economic development tax increment financing distri ct. (2) The public purposes of the subsidy are to facilitate development of the Authority's industrial park, increase net jobs in the City and the State, and increase the tax base of the City and the State. (3) The goals for the subsidy are: to secure development of the Minimum Improvements on the Redevelopment Property; to maintain such improvements as a production facility for the time period described in clause (6) below; and to create the jobs and wage levels in accordance with Section 3.8(b) hereof. (4) If the goals described in clause (3) are not met, the Redeveloper must make the payments to the Authority described in Section 3.8( c). (5) The subsidy is needed to induce Redeveloper to locate its business at this site, and to mitigate the cost of assessments for public infrastructure, all as determined by the Authority upon approval of the TIP Plan. (6) The Redeveloper must continue operation of the Minimum Improvements as a "Qualified Facility" for at least five years after the Benefit Date (defined hereinafter), subject to the continuing obligation described in Section 1 0.3 of this Agreement. For the purposes of this Section, the term Qualified Facility means a distribution, warehouse or manufacturing facility, including office space necessary for and related to those activities, all within the meaning of Section 469.176, subd. 4c of the TIF Act. The improvements will be a Qualified Facility as long as the Minimum Improvements are operated by Redeveloper or a tenant for the aforementioned qualified uses. During any period when the Minimum Improvements are vacant and not operated for the aforementioned qualified uses, the Minimum Improvements will not constitute a Qualified Facility. (7) The Redeveloper does not have a parent corporation. (8) The Redeveloper has not received, and does not expect to receive, financial assistance from any other "grantor" as defined in the Business Subsidy Act, in connection with the Development Property or the Minimum Improvements. 305850vl MNI MNI90-125 10 . . . (b) Job and Wage Goals. The "Benefit Date" of the assistance provided in this Agreement is the earlier of the date of issuance of completion of the Minimum Improvements or the date the Minimum Improvements are occupied by Redeveloper or a tenant of Redeveloper. Within two years after the Benefit Date (the "Compliance Date"), the Redeveloper shall (i) retain at least 5 full- time equivalent jobs permanent to the Redevelopment Property from another location outside the City; (ii) cause to be created at least 6 new full-time equivalent permanent jobs on the Redevelopment Property (above and beyond the 5 retained jobs); and (iii) cause the average hourly wage of the 11 total jobs to be at least $18.81 per hour, exclusive of benefits. Jobs created by any tenants within the Minimum Improvements will count toward the requirements of this Section. Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph are met by the Compliance Date, those goals are deemed satisfied despite the Developer's continuing obligations under Sections 3.8(a)(6) and 3.8(d). The Authority may, after a public hearing, extend the Compliance Date by up to one year, provided that nothing in this section will be construed to limit the Authority's legislative discretion regarding this matter. (c) Remedies. If the Redeveloper fails to meet the goals described in Section 3.8(a)(3), the Redeveloper shall repay to the Authority upon written demand from the Authority a "pro rata share" of the outstanding principal amount of the Interfund Loan together with interest on that amount at the implicit price deflator as defined in Minnesota Statutes, Section 116J.994, subd. 6, accrued from the date of substantial completion of the Minimum Improvements to the date of payment. The term "pro rata share" means percentages calculated as follows: (i) if the failure relates to the number of jobs, the jobs required less the jobs created, divided by the jobs required; (ii) if the failure relates to wages, the number of jobs required less the number of jobs that meet the required wages, divided by the number of jobs required; (iii) if the failure relates to maintenance of the facility as a Qualified Facility in accordance with Section 3.8(a)(6), 60 less the number of months of operation as a Qualified Facility (where any month in which the Qualified Facility is in operation for at least 15 days constitutes a month of operation), commencing on the Benefit Date and ending with the date the Qualified Facility ceases operation as determined by the Authority Representative, divided by 60; and (iv) if more than one of clauses (i) through (iii) apply, the sum of the applicable percentages, not to exceed 100%. Nothing in this Section shall be construed to limit the Authority's remedies under Article IX hereof. In addition to the remedy described in this Section and any other remedy available to the Authority for failure to meet the goals stated in Section 3.8(a)(3), the Redeveloper agrees and understands that it may not a receive a business subsidy from the Authority or any grantor (as defined in the Business Subsidy Act) for a period of five years from the date of the failure or until the Redeveloper satisfies its repayment obligation under this Section, whichever occurs first. 3058 50v 1 MNl MN 190.125 11 . . . (d) Reports. The Redeveloper must submit to the Authority a written report regarding business subsidy goals and results by no later than February I of each year, commencing February 1,2008 and continuing until the later of (i) the date the goals stated Section 3.8(a)(3) are met; (ii) 30 days after expiration of the period described in Section 3.8(a)(6); or (iii) if the goals are not met, the date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with Section 116J.994, subdivision 7 of the Business Subsidy Act. The Authority will provide information to the Redeveloper regarding the required forms. If the Redeveloper fails to timely file any report required under this Section, the Authority will mail the Redeveloper a warning within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper fails to provide a report, the Redeveloper must pay to the Authority a penalty of $1 00 for each subsequent day until the report is filed. The maximum aggregate penalty payable under this Section $1,000. Section 3.9. Payment of Administrative Costs. The Authority acknowledges that upon execution of the Preliminary Agreement, Redeveloper has deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which term means out of pocket costs incurred by the Authority and City together with staff costs of the Authority and City, all attributable to or incurred in connection with the negotiation and preparation of the Preliminary Agreement, this Agreement, the TIF Plan, and other documents and agreements in connection with the development of the Redevelopment Property. At Redeveloper's request, but no more often than monthly, the Authority will provide Redeveloper with a written report including invoices, time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding balance of funds deposited. If at any time the Authority determines that the deposit is insufficient to pay Administrative Costs, the Redeveloper is obligated to pay such shortfall within 15 days after receipt of a written notice from the Authority containing evidence of the unpaid costs. If any balance of funds deposited remains upon issuance of the Certificate of Completion pursuant to Section 4.4 of this Agreement, the Authority shall promptly return such balance to Redeveloper; provided that Redeveloper remains obligated to pay subsequent Administrative Costs related to any amendments to this Agreement requested by Redeveloper. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains obligated under this section for Administrative Costs incurred through the effective date of termination. (The remainder of this page is intentionally left blank.) 305850vl MNI MN190-125 12 . . . ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the approved Construction Plans and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. ,Section 4.2. Construction Plans. (a) Before closing on conveyance of the Redevelopment Property under Article III, the Redeveloper shall submit to the Authority completed Construction Plans. The Construction Plans shall provide for the construction of the Minimum Improvements and shall be in conformity with the Otter Creek Crossing Declaration, the Redevelopment Plan, the TIF Plan, this Agreement, and all applicable State and local laws and regulations. The Authority will approve the Construction Plans in writing if: (i) the Construction Plans conform to the terms and conditions of this Agreement; (ii) the Construction Plans conform to the goals and objectives of the Otter Creek Crossing Declaration and the Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds available to the Redeveloper for construction of the Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation to comply with the terms of this Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of an Event of Default. If approval of the Construction Plans is requested by the Redeveloper in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefore, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans in whole or in part, the Redeveloper shall submit new or corrected Construction Plans within 30 days after written notification to the Redeveloper of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be umeasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. (b) If the Redeveloper desires to make any material change in the Construction Plans after their approval by the Authority, the Redeveloper shall submit the proposed change to the Authority for its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and 305850vl MNI MNI90-125 13 . . . notifY the Redeveloper in "Titing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such rejection shall be made within ten (10) days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper must commence construction of the Minimum Improvements by no later than 30 days after Closing on conveyance of the Redevelopment Property. Subject to Unavoidable Delays, the Redeveloper must substantially complete construction of the Minimum Improvements by , 2007. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans as submitted by the Redeveloper and approved by the Authority. The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such successors and assigns, shall promptly begin and diligently prosecute to completion the redevelopment of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3 of this Agreement. Subsequent to conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until construction of the Minimum Improvements has been completed, the Redeveloper shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Redeveloper with respect to such construction. Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating solely to the obligations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereof), the Authority will furnish the Redeveloper with a Certificate of Completion in substantially the form provided in Schedule E. Such certification by the Authority shall be (and it shall be so provided in the deed and in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants in the Agreement and in the deed with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum Improvements, or any part thereof. (b) The certificate provided for in this Section 4.4 of this Agreement shall be in such form as will enable it to be recorded in the proper office for the recordation of deeds and other instruments pertaining to the Redevelopment Property. If the Authority shall refuse or fail to provide any certification in accordance with the provisions of this Section 4.4 of this Agreement, the Authority shall, within thirty (30) days after written request by the Redeveloper, provide the 30;850vl MNl MN190-125 14 . . . Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be commenced upon beginning of excavation for the building, and shall be deemed to be substantially completed when the Redeveloper has received a certificate of occupancy issued by the City for the Minimum Improvements. Section 4.5. Ponding and Utilitv Easement. The Redeveloper acknowledges that the Redevelopment Property shall be conveyed to Redeveloper subject to an existing ponding and utility easement encumbering the property, as shown on the recorded Plat of the Redevelopment Property. The easement is donated and dedicated to the public for public use for ponding and utility purposes only. The City acknowledges that it shall be responsible for maintenance of the existing storm sewer pond. (The remainder of this page is intentionally left blank.) 305850vl MNI MN19O-125 15 . . . ARTICLE V Insurance Section 5.1. Insurance. The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk __ Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Comprehensive general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations and contractual liability insurance) together with an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii) Workers' compensation insurance, with statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Comprehensive general public liability insurance, including personal injury liability (with employee exclnsion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1 ,000,000, and shall be endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Redeveloper, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the Redeveloper may be self-insured with respect to all or any part of its liability for workers' compensation. 305850vl MNI MN190-125 16 . (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modifY it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Redeveloper and the Authority at least 30 days before the cancellation or modification becomes effective. In lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Redeveloper shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notifY the Authority immediately in the case of damage exceeding $100,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net proceeds of any insurance relating to such damage received by the Redeveloper to the payment or reimbursement of the costs thereof. . The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Redeveloper. (e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this Section, the Redeveloper shall have the option of paying to the Authority an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay in full the outstanding principal and accrued interest on the Interfund Loan. (f) The Redeveloper and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. (The remainder of this page is intentionally left blank.) . 305850vl MNIMNI90-125 17 . . . ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. Redeveloper agrees for itself, its successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes, that it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on behalf of the Authority through the Termination Date to sue the Redeveloper or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit in which the Authority is the prevailing party, the Authority shall also be entitled to recover its costs, expenses and reasonable attorney fees. Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination Date it will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property through: (a) willful destruction of the Redevelopment Property or any part thereof; or (b) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.l(e). The Redeveloper also agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Redevelopment Property pursuant to any law, or transfer or permit transfer of the Redevelopment Property to any entity whose ownership or operation of the property would result in the Redevelopment Property being exempt from real estate taxes under State law (other than any portion thereof dedicated or conveyed to the City or Authority in accordance with this Agreement). Section 6.3. Assessment Agreement. (a) Upon closing on conveyance of the Redevelopment Property to the Redeveloper under Article III hereof, the Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177, subd. 8, specifying an assessor's minimum Market Value for the Redevelopment Property and Minimum Improvements constructed thereon. The amount of the minimum Market Value shall be $ as of January 2, 2008 and each January 2 thereafter, notwithstanding the status of construction by such dates. (b) The Assessment Agreement shall be substantially in the form attached hereto as Schedule F. Nothing in the Assessment Agreement shall limit the discretion of the assessor to assign a market value to the property in excess of such assessor's minimum Market Value. The Assessment Agreement shall remain in force for the period specified in the Assessment Agreement. (The remainder of this page is intentionally left blank.) 305850vl ~IMNl90-125 18 Financinl! . ARTICLE VII Section 7.1. Financing. (a) Before conveyance of the Redevelopment Property, the Redeveloper shall submit to the Authority evidence of one or more commitments for mortgage financing which, together with committed equity for such construction, is sufficient for the construction of the Minimum Improvements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long-term take-out financing commitment, or any combination of the foregoing. Such commitment or commitments for short term or long term mortgage financing shall be subject only to such conditions as are normal and customary in the mortgage banking industry. (b) If the Authority finds that the financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements, then the Authority shall notify the Redeveloper in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30) days from the date when the Authority is provided the evidence of financing. A failure by the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Redeveloper shall submit adequate evidence of financing within thirty (30) days after such rejection. Approval of any subordination agreement under Section 7.3 hereof will constitute approval of financing for the purposes of this Section. . Section 7.2. Authoritv's Option to Cure Default on Mortgage. In the event that there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Redeveloper shall cause the Authority to receive copies of any notice of default received by the Redeveloper from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Redeveloper within such cure periods as are available to the Redeveloper under the Mortgage documents. In the event there is an event of default under this Agreement, the Authority will transmit to the Holder of any Mortgage a copy of any notice of default given by the Authority pursuant to Article IX of this Agreement. Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to facilitate the Redeveloper obtaining financing for purchase of the Redevelopment Property and for construction according to the Construction Plans, the Authority agrees to subordinate its rights under this Agreement, including without limitation its rights of reversion under Sections 9.3 and 9.4 hereof, provided that (a) such subordination shall be subject to such reasonable terms and conditions as the Authority and Holder mutually agree in writing, (b) the Authority's obligation to subordinate is contingent on the Authority's approval of the financing in accordance with Section 7.1 hereof, and (c) in no event will the Authority subordinate its rights under the Assessment Agreement described in Section 6.3. . 305850vl MNl MN190-125 19 . ARTICLE VIII Prohibitions A!!ainst Assi!!nment and Transfer: Indemnification Section 8.1. Representation as to Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevelopment Property or portions thereof, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. Section 8.2. Prohibition Against Redeveloper's Transfer of Propertv and Assignment of Agreement. The Redeveloper represents and agrees that until the Termination Date: . (a) Except only by way of security for, and only for, the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to the Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. (b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment Property or any portion thereof, seeks to be released from its obligations under this Redevelopment Agreement as to the portions of the Redevelopment Property that is transferred or assigned, the Authority and City shall be entitled to require, except as otherwise provided in the Agreement, as conditions to any such release that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority and City, necessary and adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to the portion of the Redevelopment Property to be transferred. . (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority and City, have expressly assumed all of the obligations of the Redeveloper under this Agreement as to the portion of the Redevelopment Property to be transferred and agreed to be subject to all the conditions and restrictions to which the Redeveloper is subject as to such portion; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided in this Agreement or agreed to in writing by the Authority and the City) deprive the Authority and or City of any rights or remedies or 20 305850vl MNI MNI90-125 . controls with respect to the Redevelopment Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Redevelopment Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority and the City to the contrary, no such transfer or approval by the Authority and the City thereof shall be deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement or the Redevelopment Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority and the City. In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred, assigned or otherwise conveyed. . Section 8.3. Release and Indemnification Covenants. (a) The Redeveloper releases from and covenants and agrees that the Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for and agrees to indemnify and hold harmless the Authority and the City and the governing body members, officers, agents, servants and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the following named parties, the Redeveloper agrees to protect and defend the Authority and the City and the governing body members, officers, agents, servants and employees thereof, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) The Authority and the City and the governing body members, officers, agents, servants and employees thereof shall not be liable for any damage or injury to the persons or property of the Redeveloper or its officers, agents, servants or employees or any other person who may be about the Redevelopment Property or Minimum Improvements due to any act of negligence of any person. . 305850vl MNIMNI90-125 21 . . . (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent, servant or employee of the Authority in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 305850vl MNJ MN190-125 22 . . . ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides): (a) any failure by any party to observe or perform any other covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or under any other agreement entered- into between the Redeveloper and the Authority or City in connection with development of the Redevelopment Property; and (b) any default by Redeveloper under a Mortgage, if any. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non-defaulting party may exercise its rights under this Section 9.2 after providing thirty days written notice to the defaulting party of the Event of Default, but only if the Event of Default has not been cured within said thirty days or, if the Event of Default is by its nature incurable within thirty days, the defaulting party does not provide assurances reasonably satisfactory to the non-defaulting party that the Event of Default will be cured and will be cured as soon as reasonably possible: (a) Suspend its performance under the Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under the Agreement. (b) Cancel and rescind or terminate the Agreement. (c) Take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. (d) Notwithstanding anything to the contrary herein, in the case of defaults by Redeveloper described in Section 3.8, the Authority has the additional remedies specified therein, subject to the qualification described in Section 10.3. Section 9.3. Revesting Title in Authority UpOn Happening of Event Subsequent to Convevance to Redeveloper. In the event that subsequent to conveyance of the Redevelopment Property to the Redeveloper and prior to receipt by the Redeveloper of the Certificate of Completion for the Minimum Improvements required to be constructed on that parcel: (a) the Redeveloper, subject to Unavoidable Delays, shall fail to begin construction of the Minimum Improvements in conformity with this Agreement and such failure to begin 305850v1 MNI MNl90-125 23 . construction is not cured within 90 days after written notice from the Authority to the Redeveloper to do so; or (b) subject to Unavoidable Delays, the Redeveloper after commencement of the construction of the Minimum Improvements, fails to carry out its obligations with respect to the construction of such improvements (including the nature and the date for the completion thereof), or abandons or substantially suspends construction work, and any such failure, abandonment, or suspension shall not be cured, ended, or remedied within 90 days after written demand from the Authority to the Redeveloper to do so; or (c) the Redeveloper fails to pay real estate taxes or assessments on the parcel or any part thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel (except to the extent permitted by this Agreement), or shall suffer any levy or attachment to be made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged or provision satisfactory to the Authority made for such payment, removal, or discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if the Redeveloper first notifies the Authority of its intention to do so, it may in good faith contest any mechanics' or other lien filed or established and in such event the Authority shall permit such mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest and any appeal and during the course of such contest the Redeveloper shall keep the Authority informed respecting the status 0 f such defense; or . (d) there is, in violation of the Agreement, any transfer of the parcel or any part thereof, or any change in the ownership or distribution thereof of the Redeveloper, or with respect to the identity of the parties in control of the Redeveloper or the degree thereof, and such violation is not cured within sixty (60) days after written demand by the Authority to the Redeveloper, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (e) the Redeveloper fails to comply with any of its other covenants under this Agreement related to the subject component of the Minimum Improvements and fails to cure any such noncompliance or breach within thirty (30) days after written demand from the Authority to the Redeveloper to do so, or if the event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period, provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as reasonably possible; or (f) the Holder of any Mortgage secured by the subject property exercises any remedy provided by the Mortgage documents or exercises any remedy provided by law or equity in the event ofa default in any of the terms or conditions of the Mortgage, . Then the Authority shall have the right to re-enter and take possession of the parcel and to terminate (and revest in the Authority) the estate conveyed by the deed to the Redeveloper, it being the intent of this provision, together with other provisions of the Agreement, that the conveyance of the parcel to the Redeveloper shall be made upon, and that the deed shall contain a condition 305850vl MNIMNI90-125 24 . subsequent to the effect that in the event of any default on the part of the Redeveloper and failure on the part of the Redeveloper to remedy, end, or abrogate such default within the period and in the manner stated in such subdivisions, the Authority at its option may declare a termination in favor of the Authority of the title, and of all the rights and interests in and to the parcel conveyed to the Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated in Section 9.4(a)-(f) have not been cured within the time periods provided above. Section 9.4. Resale of Reacouired PropertY: Disposition of Proceeds. Upon the revesting in the Authority of title to and/or possession of the parcel or any part thereof as provided in Section 9.3, the Authority shall, pursuant to its responsibilities under law, use its best efforts to sell the parcel or part thereof as soon and in such manner as the Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan and TIP Plan to a qualified and responsible party or parties (as determined by the Authority) who will assume the obligation of making or completing the Minimum Improvements or such other improvements in their stead as shall be satisfactory to the Authority in accordance with the uses specified for such parcel or part thereof in the Redevelopment Plan and TIF Plan. During any time while the Authority has title to and/or possession of a parcel obtained by reverter, the Authority will not disturb the rights of any tenants under any leases encumbering such parcel. Upon resale of the parcel, the proceeds thereof shall be applied: . (a) First, to reimburse the Authority for all costs and expenses incurred by them, including but not limited to salaries of personnel, in connection with the recapture, management, and resale of the parcel (but less any income derived by the Authority from the property or part thereof in connection with such management); all taxes, assessments, and water and sewer charges with respect to the parcel or part thereof (or, in the event the parcel is exempt from taxation or assessment or such charge during the period of ownership thereof by the Authority, an amount, if paid, equal to such taxes, assessments, or charges (as determined by the Authority assessing official) as would have been payable if the parcel were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the parcel or part thereof at the time of revesting of title thereto in the Authority or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Redeveloper, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the subject improvements or any part thereof on the parcel or part thereof; and any amounts otherwise owing the Authority by the Redeveloper and its successor or transferee; and (b) Second, to reimburse the Redeveloper, its successor or transferee, up to the amount equal to (1) the purchase price paid by Redeveloper under Section 3.2; plus (2) the amount actually invested by it in making any of the subject improvements on the parcel or part thereof, less (2) any gains or income withdrawn or made by it from the Agreement or the parcel. Any balance remaining after such reimbursements shall be retained by the Authority as its property. . Section 9.5. No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority or Redeveloper is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other 305850vl MNI MN190-125 25 . . . remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.6. No Additional Waiver Implied bv One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. (The remainder of this page is intentionally left blank.) 305850vl MNrMN190-125 26 . ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authoritv Representatives Not Individuallv Liable. The Authority and the Redeveloper, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official, or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Redeveloper, or any successor in interest, in the event of any default or breach by the Authority or City or for any amount which may become due to the Redeveloper or successor or on any obligations under the terms of the Agreement. Section 10.2. Equal Employment Opportunitv. The Redeveloper, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in the Agreement it will comply with all applicable federal, state and local equal employment and non-discrimination laws and regulations. . Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination Date, the Redeveloper, and such successors and assigns, shall use the Redevelopment Property and the Minimum Improvements thereon only as Qualified Facility (as defined in Section 3.8 hereof), provided that after expiration of the five-year period described in Section 3.8(c), the repayment remedy described in Section 3.8(d) may not be imposed on Redeveloper for default under this Section, and Authority is limited to any other remedies available under Article IX hereof. Further, until the Termination Date the Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. 27 Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under the Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and . 305850.1 MNI MN190.125 28 . (a) in the case of the Redeveloper, is addressed to or delivered personally to the Redeveloper at WRE, LLC, 6551 Jansen Avenue NE, Suite 208, Albertville, MN 55301, Attn: Brian Walker; and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at Housing and Redevelopment Authority in and for the City of Monticello, 505 Walnut Street, Suite I, Monticello, Minnesota 55362, Attn: Executive Director; or at such other address with respect to either such party as that party may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. Counteroarts. This Agreement may be executed m any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the County recorder. The Redeveloper shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Redeveloper. Section 10.10. Authoritv Approvals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative. . Section 10.11. Termination. This Agreement terminates on the Termination Date. Within 30 days after the Termination Date, the Authority will deliver to Redeveloper a written release in recordable form satisfactory to Redeveloper, evidencing termination of this Agreement. Section 10.12. Choice of Law and Venue. This Agreement shall be govemed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. (The remainder of this page is intentionally left blank.) . 305850vl MNI MNl90.125 . . . IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of 2007, by and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, a public body politic and corporate, on behalf of the Authority. Notary Public 30;8;Ovl MNI MNI90-12; 8-1 . . . WRE,LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me , 2007 by , the Minnesota limited liability company, on behalf of the company. this _ day of of WRE, LLC, a Notary Public 305850vl MNI MN190-125 8-2 . . . SCHEDULE A REDEVELOPMENT PROPERTY Lot 2, Block 1, Otter Creek Crossing 3rd Addition, according to the recorded plat thereof, Wright County, Minnesota l05850vl MNIMNI90-125 A-I . SCHEDULE B FORt'VI OF QUIT CLAIM DEED TIUS INDENTURE, between the Housing and Redevelopment Authority in and for the City of Monticello, Monticello, Minnesota, a public body corporate and politic (the "Grantor"), and WRE, LLC, a Minnesota limited liability company, (the "Grantee"). WITNESSETH, that Grantor, in consideration of the sum of $ and other good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant, bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or parcel ofland lying and being in the County of Wright and State of Minnesota described as follows, to-wit (such tract or parcel ofland is hereinafter referred to as the "Property"): Lot 2, Block I, Otter Creek Crossing 3rd Addition, according to the recorded plat thereof, Wright County, Minnesota To have and to hold the same, together with all the hereditaments and appurtenances thereunto belonging. SECTION 1. . It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on the _th day of ,2007, identified as "Purchase and Redevelopment Contract" (hereafter referred to as the "Agreement") and that the Grantee shall not convey this Property, or any part thereof, except as permitted by the Agreement until a certificate of completion releasing the Grantee from certain obligations of said Agreement as to this Property or such part thereof then to be conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee from mortgaging this Property in order to obtain funds for the purchase of the Property hereby conveyed or for erecting the Minimum Improvements thereon (as defined in the Agreement) in conformity with the Agreement, any applicable development program and applicable provisions of the zoning ordinance of the City of Monticello, Minnesota, or for the refinancing of the same. B-1 It is specifically agreed that the Grantee shall promptly begin and diligently prosecute to completion the redevelopment of the Property through the construction of the Minimum Improvements thereon, as provided in the Agreement. . Promptly after completion of the Minimum Improvements in accordance with the provisions of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifYing. Such certification by the Grantor shall be (and it shall be so provided in the certification itself) a conclusive determination of satisfaction and termination of the agreements and covenants of the Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and assigns, to construct the Minimum Improvements and the dates for the beginning and completion thereof. Such certification and such determination shall not constitute evidence of compliance with 305850vl MNI MN190.125 . or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the Minimum hnprovements, or any part thereof. All certifications provided for herein shall be in such form as will enable them to be recorded with the County Recorder, or Registrar of Titles, Wright County, Minnesota. If the Grantor shall refuse or fail to provide any such certification in accordance with the provisions of the Agreement and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide the Grantee with a written statement indicating in adequate detail in what respects the Grantee has failed to complete the Minimum hnprovements in accordance with the provisions of the Agreement or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Grantor, for the Grantee to take or perform in order to obtain such certification. SECTION 2. The Grantee's rights and interest in the Property are subject to the terms and conditions of Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to the Property under conditions specified therein, including but not limited to termination of such right upon issuance of a Certificate of Completion as defined in the Agreement. SECTION 3. . The Grantee agrees for itself and its successors and assigns to or of the Property or any part thereof, hereinbefore described, that the Grantee and such successors and assigns shall comply with all provisions of the Agreement that relate to the Property or use thereof for the periods specified in the Agreement, including without limitation the covenant set forth in Section 10.3 thereof. It is intended and agreed that the above and foregoing agreements and covenants shall be covenants running with the land for the respective terms herein provided, and that they shall, in any event, and without regard to technical classification or designation, legal or otherwise, and except only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee, its successors and assigns, and every successor in interest to the Property, or any part thereof or any interest therein, and any party in possession or occupancy of the Property or any part thereof. In amplification, and not in restriction of, the provisions of the preceding section, it is intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants provided herein, both for and in its own right, and also for the purposes of protecting the interest of the community and the other parties, public or private, in whose favor or for whose benefit these agreements and covenants have been provided. Such agreements and covenants shall run in favor of the Grantor without regard to whether the Grantor has at any time been, remains, or is an owner of any land or interest therein to, or in favor of, which such agreements and covenants relate. The Grantor shall have the right, in the event of any breach of any such agreement or covenant to exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall . 305850vl MNI MN19Q.125 B-2 . . . not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed on grounds of Grantee's failure to comply with its obligations under this Section 3. SECTION 4. This Deed is also given subject to: (a) Provision of the ordinances, building and zoning laws of the City of Monticello, and state and federal laws and regulations in so far as they affect this real estate. (b) Declaration of Protective Covenants, Conditions and Protections for Otter Creek Crossing filed in the Office of the County Recorder for Wright County, Minnesota as Document No. (c) [Any other permitted encumbrances after Redeveloper's title review] Grantor certifies that it does not know of any wells on the Property. 305850vl MNIMNI90-125 B-3 . IN WITNESS WHEREOF, the Grantor has caused this Deed to be duly executed in its behalf by its Chair and Executive Director and has caused its corporate seal to be hereunto affixed this day of , 2007. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF WRIGHT ) . On this _ day of , 2007, before me, a notary public within and for Wright County, personally appeared and to me personally known who by me duly sworn, did say that they are the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, Monticello, Minnesota (the "Authority") named in the foregoing instrument; that the seal affixed to said instrument is the seal of said Authority; that said instrument was signed and sealed on behalf of said Authority pursuant to a resolution of its governing body; and said and acknowledged said instrument to be the free act and deed of said Authority. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered 470 US Bank Plaza Minneapolis, Minnesota 55402 . B-4 305850v I MNI MN 190.125 . u ti 1:1: U <;IJ ;>< ~ f;l;l ~ o c=: ~ Eo- Z f;l;l ::;: ~ o .... ~ f;l;l ~ ~ f;I;. o Eo- -< .... ~ ..-< , U ~ !:! ~ z . ::< Z ::< ., 0 ~ ~ ~ 0 M . SCHEDULE D HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO RESOLUTION NO. AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-38 BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established tax increment financing district no. 1-38 (the "TIF District") within the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") and Sections 469.001 to 469.047 (the "HRA Act"). . 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority owns or will acquire certain property (the "Redevelopment Property") and has incurred or will incur certain costs to prepare such property for redevelopment. The Authority has determined that the market price of the improved Redevelopment Property is at least $196,020.00, or $3.00 per square foot. 1.05. The Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") with WRE, LLC (the "Redeveloper"), under which the Authority will (among other things) convey the Redevelopment Property to the Redeveloper for a purchase price of $43,560.00. D-l 1.06. By conveying the Redevelopment Property under the Contract, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property. Such forbearance represents an advance of Authority funds in the amount of $152,460.00 (the write- down in purchase price). . 1.07. The Authority intends to designate such advances as an interfund loan in 305850vl MNI MNl90-125 . . . accordance with the terms of this resolution and the TIF Act. Section 2. Reoavment of Interfund Loan. 2.01. The Authority will reimburse itself for the land advance in the principal amount of $152,460.00 together with interest at the rate of 8% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of Closing on conveyance of the Redevelopment Property to the Redeveloper under the Development Agreement (hereafter, the "Closing Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2007. The interest rate will, without further action by the Authority, be adjusted on January 1 of each year to reflect the greater of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar year. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi- annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Administrator, through the date of last receipt of tax increment from the TIT District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TIF District received by the Authority from Wright County in the six-month period before any Payment Date, less any amounts determined by the Authority to be applied toward administrative expenses in accordance with the TIF Act. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded semiannually on February I and August 1 of each year and added to principal until the first Payment Date, unless otherwise specified by the City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. The Authority may at any time make a determination to forgive the outstanding principal amount and accrued interest on the Interfund Loan to the extent permissible under law. 305850vl MNIMNI90.125 D-2 . . . 2.07. The Authority may from time to time amend the tenus of this Resolution to the extent penuitted by law, including without limitation amendment to the payment schedule and the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. subd. 7 of the TIF Act. Section 3. Effective Date. This resolution is effective upon execution in full of the Contract. Adopted this _ day of ,2007 Chair ATTEST: Executive Director 305850vl MNI MNI90-125 D-3 . SCHEDULE E CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota, as Deed Document Number(s) and , respectively, has conveyed to WRE, LLC (the "Grantee"), the following described land in County of Wright and State of Minnesota, to-wit: Lot 2, Block 1, Otter Creek Crossing 3rd Addition, Wright County, Minnesota and WHEREAS, said Deed contained certain covenants and restrictions set forth in Sections 1 and 2 of said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; . NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed and the agreements and covenants in Article IV of the Agreement (as described in said Deed) have been performed by the Grantee therein, and the County Recorder or the Registrar of Titles in and for the County of Wright and State of Minnesota is hereby authorized to accept for recording and to record, the filing of this instrument, to be a conclusive determination of the satisfactory termination of the covenants and conditions of Article IV of the, but the covenants created by Sections 3 and 4 of said Deed shall remain in full force and effect. Dated: ,20__ HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA By Authority Representative . 305850v 1 MNI MN 190-125 E-l . . . SCHEDULE F ASSESSMENT AGREEMENT and ASSESSOR'S CERTIFICATION By and Between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO and WRE, LLC This Document was drafted by: KENNEDY & ORA YEN, Chartered 470 U.S. Bank Plaza Minneapolis, Minnesota 55402 305850vl MNIMNl90-125 F-l . . . ASSESSMENT AGREEMENT THIS AGREEMENT, made on or as of the _ day of ,2007, and between the Housing and Redevelopment Authority in and for the City of Monticello, a public body corporate and politic (the "Authority") and WRE, LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH, that WHEREAS, on or before the date hereof the Authority and the Redeveloper have entered into a Purchase and Redevelopment Agreement dated , 2007 (the "Redevelopment Contract"), pursuant to which the Authority is to facilitate development of certain property in the City of Monticello hereinafter referred to as the "Property" and legally described in Exhibit A hereto; and WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to construct certain improvements upon the Property (the "Minimum Improvements"); and WHEREAS, the Authority and the Redeveloper desire to establish a minimum market value for the Property and the Minimum Improvements constructed thereon, pursuant to Minnesota Statutes, Section 469.177, Subdivision 8; and WHEREAS, the Authority and the Assessor for the County (the "Assessor") have reviewed the preliminary plans and specifications for the Minimum Improvements and have inspected such improvements; NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: I. The minimum market value which shall be assessed for the Property described in Exhibit A, together with the Minimum Improvements thereon, for ad valorem tax purposes, shall be $ as of January 2, 2008 and each January 2 thereafter notwithstanding the progress of construction of such Minimum Improvements by such dates. 2. The minimum market value herein established shall be of no further force and effect and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the Authority of the final payment from the County of Tax Increments from TlF District No. 1-38; or (b) The date when the Interfirnd Loan (as defined in the Redevelopment Contract) has been paid in full, defeased or terminated in accordance with the resolution set forth in Schedule C of the Redevelopment Contract. The event referred to in Sections 2(b) of this Agreement shall be evidenced by a certificate or affidavit executed by the Authority. 3. This Agreement shall be promptly recorded by the Authority. The Redeveloper 305850vl MNIMNl9Q.125 F-2 . . . shall pay all costs of recording. 4. Neither the preambles nor provisions of this Agreement are intended to, nor shall they be construed as, modifYing the terms of the Redevelopment Contract between the Authority and the Redeveloper. 5. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. 6. Each of the parties has authority to enter into this Agreement and to take all actions required of it, and has taken all actions necessary to authorize the execution and delivery of this Agreement. 7. In the event any provision of this Agreement shall be held invalid and unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8. The parties hereto agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and modifications hereto, and such further instruments as may reasonably be required for correcting any inadequate, or incorrect, or amended description of the Property or the Minimum Improvements thereon, or for carrying out the expressed intention of this Agreement, including, without limitation, any further instruments required to delete from the description of the Property such part or parts as may be included within a separate assessment agreement. 9. Except as provided in Section 8 of this Agreement, this Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 10. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 11. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 305850vl MNI MN190-125 F-3 . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO By Its Chair By Its Executive Director STATE OF MINNESOTA ) ) SS. COUNTI OF WRIGHT ) The foregoing instrument was acknowledged before me this _ day of , 2007 by and , the Chair and Executive Director of the Housing and Redevelopment Authority in and for the City of Monticello, on behalf of the Authority. Notary Public 305850vl MNI MN190-125 F-4 . . . WRE,LLC By Its STATE OF MINNESOTA ) ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this _ day of 2007 by , the ofWRE, LLC, a Minnesota limited liability company, on behalf of the limited liability company. Notary Public 305850v( MNl MNl90-125 F-5 . . . CERTIFICATION BY COUNTY ASSESSOR The undersigned, having reviewed the plans and specifications for the improvements to be constructed and the market value assigned to the land upon which the improvements are to be constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for the assessment of the above described property, hereby certifies that the values assigned to the land and improvements are reasonable. STATE OF MINNESOTA ) ) ss COUNTY OF WRIGHT ) County Assessor for the County of Wright The foregoing instrument was acknowledged before me this _ day of 2007 by , the County Assessor of the County of Wright. 305850vl MNI MNl90-125 Notary Public F-6 . . . EXHffiIT A of ASSESSMENT AGREEMENT Legal Description of Property Lot 2, Block I, Otter Creek Crossing 3rd Addition, according to the recorded plat thereof, Wright County, Minnesota 305850vl MNIMNI90-125 F-7 . . . SCHEDULE G [Declaration of covenants - Phase II] 305850vl MNIMN190-125 G-1 . . . HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO ~ RESOLUTION NO. AUTHORIZING INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1-38 BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "Authority") as follows: Section 1. Background. 1.01. The Authority has established tax increment financing district no. 1-38 (the "TIF District") within the Central Monticello Redevelopment Project No. I (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the ''TIF Act") and Sections 469.001 to 469.047 (the "HRA Act"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available Authority funds. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority is authorized to advance or loan money from any fund from which such advances may be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The Authority owns or will acquire certain property (the "Redevelopment Property") and has incurred or will incur certain costs to prepare such property for redevelopment. The Authority has determined that the market price of the improved Redevelopment Property is at least $196,020.00, or $3.00 per square foot. 1.05. The Authority proposes to enter into a Purchase and Redevelopment Contract (the "Contract") with WRE, LLC (the "Redeveloper"), under which the Authority will (among other things) convey the Redevelopment Property to the Redeveloper for a purchase price of $43,560.00. 1.06. By conveying the Redevelopment Property under the Contract, at Closing the Authority will forgo receipt the full market price of the Redevelopment Property. Such forbearance represents an advance of Authority funds in the amount of $152,460.00 (the write-down in purchase price). . . . 1.07. The Authority intends to designate such advances as an interfund loan in accordance with the terms of this resolution and the TIF Act. Section 2. Reoavrnent of Interfund Loan. 2.01. The Authority will reimburse itself for the land advance in the principal amount of $152,460.00 together with interest at the rate of 8% per annum (the "Interfund Loan"). Interest accrues on the principal amount from the date of Closing on conveyance of the Redevelopment Property to the Redeveloper under the Development Agreement (hereafter, the "Closing Date"). The interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270CAO and Section 549.09, both in effect for calendar year 2007. The interest rate will, without further action by the Authority, be adjusted on January I of each year to reflect the greater of the rate specified under Minnesota Statutes, Section 270CAO and Section 549.09 in effect for that calendar year. 2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-annually on each August I and February 1 (each a "Payment Date"), commencing on the first Payment Date on which the Authority has Available Tax Increment (defined below), or on any other dates determined by the City Administrator, through the date of last receipt oftax increment from the TlF District. 2.03. Payments on the Interfund Loan will be made solely from Available Tax Increment, defined as tax increment from the TlF District received by the Authority from Wright County in the six-month period before any Payment Date, less any amounts determined by the Authority to be applied toward administrative expenses in accordance with the TIP Act. Payments shall be applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing Date will be compounded semiannually on February 1 and August 1 of each year and added to principal until the first Payment Date, unless otherwise specified by the City Administrator. 2.04. The principal sum and all accrued interest payable under this resolution is pre-payable in whole or in part at any time by the Authority without premium or penalty. 2.05. This resolution is evidence of an internal borrowing by the Authority in accordance with Section 469.178, subdivision 7 of the TlF Act, and is a limited obligation payable solely from Available Tax Increment pledged to the payment hereof under this resolution. The Interfund Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto except out of Available Tax Increment. The Authority shall have no obligation to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid after the final Payment Date. 2.06. 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O O C O O O 'O y O O N y CO l0 O ~ t6 M C L c c ~ • ' ~ c o E m ° ~ ~ • > J N f6 L C y •p w c p U •O ~ ~ C ` 'i7 CU ~ c O d 14 m C E a~ N •O 'O fl. .D CO O C y ~ 7 ~ C •O .U. a~i ~ > c o ~o co E C S . C YO L ~ U A ` N N ~ C ~ ~ p O O O O J a ~ 7t l - . . . HRA Agenda - 04/11/07 7. Consideration to approve the election of BRA officers for 2007 and approve the appointment of commissioners to committees. A. Reference and backl!round: OFFICERS In accordance with the HRA Bylaws, the chair and vice-chair shall be elected at the annual meeting of the Board of Commissioners from among the Commissioners of the Authority and shall hold office for one year or until their successors are elected and qualified. The Secretary- Treasurer shall be appointed at the annual meeting of the Board of Commissioners by the Commissioners. At the annual meeting in 1998, the commissioners discussed available time to volunteer and agreed to rotate the HRA officers among the commissioners suggesting the Vice-Chair move up to Chair. So being, the Vice Chair for 2006 was Steve Andrews, therefore, Andrew's name moves up to Chair for 2007. The next in-line for Vice Chair is Bill Fair. However, due to an expected busy year in 2006, Frie preferred not be 2006 HRA Chair. The commissioners agreed they preferred to keep the rotation of officers. The commissioners may wish to discuss this further. Following is a list of names of the previous HRA Chairs and year served: Frie 2001 2006 waived Lahr 2000 2005 2009 Murray (Fair) 1999 2004 2008 Andrews 1998 2003 2007 Barger 2002 2007 2006 Rick Wolfsteller serves as the Secretary-Treasurer and delegates the recording of minutes to Angela Schumann. Koropchak is employed as the Executive Director and serves as assistant to the Secretary-Treasurer. With the upcoming retirement of W olfsteller the end of July, the appointment of the BRA Secretary/Treasurer in the future may be the new Finance Director subject to hiring by City Council. Given the Personnel Committee has discussed the potential to merge the HRA and EDA, at that time the election of officers would be addressed per the appropriate bylaws. 1 . BRA Agenda - 04/11/07 COMMITTEES The HRA, annually or as need be, appoints a commissioner(s) to various committees. Current committees and appointees: MMkclmg-DwTInLWrrffirndBMg~ Fib~ Optics - Steve Andrews Comp Plan Update (temporary) - FrielFair B. Alternative Action: OFFICERS 1. A motion to nominate and elect as Chair and Vice Chair of the HRA for yeM 2007, and approve the appointment of Rick Wolfstell~ as Secretary-Treasur~ for 2007. as . 2. A motion to table any action. COMMITTEES 1. A motion to approve the appointment of the following commissioners: MMketing Fiber Optics C. Recommendation: No recommendation given. D. SUDDortinl! Data: None. . 2 I , , BRA Agenda - 04/11107 8. Consideration to review and accept the year-end fmancial reports for the BRA General Fund and TIF Funds as prepared bv BRA Teasurer Wolfsteller and Senior Accountant Paula Mastev. Treasurer Wolfsteller and Senior Accountant Paula will review the year-end financial reports for the HRA General Fund and TIF Funds at the meeting. The reports are either attached or will be distributed at the annual meeting. After questions and answers, the recommendation is to accept the 2006 year-end financial reports given the reports meet the satisfaction of the commissioners. I I I I BRA Agenda - 04/11/07 9. Consideration to review for amendinl!: the BRA Business Subsidv Criteria and BRA Bylaws for possible amendment and to call for a Dublic hearinl!: if determined. These are housekeeping items for review at the annual meeting of the HRA. BUSINESS SUBSIDY CRITERIA In review of the Criteria by the Executive Director, it appears no need to amend. However, given the pending bill to raise the federal minimum wage requirement, Section 5:03C., page 3., may need to be amended in the future. If so a motion calling for a public hearing date to amend the business subsidy criteria of the Monticello Housing and Redevelopment Authority would be necessary. BYLAWS In review of the Bylaws by the Executive Director, there appears no need to amend. However, given some discussion by the Personnel Committee to merge the HRA and EDA and have one Authority; then, both the business subsidy criteria and bylaws would need to be amended or abolished. Please review each of these documents. I . . PACt__: MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA Business Subsidy Criteria Public Hearing and Adoption the 8th day of SeDtember, 1999. Public Hearing and Adoption of Amendments the 4'h day of October. 2000. Public Hearing and Adoption of Amendment the 5'. day of Mav. 2004. Public Hearing and Adoption of Amendment the 3rd day of Mav. 2006 I. PURPOSE . . 1:01 The purpose of this document is to establish the Housing and Redevelopment Authority's criteria for granting of business subsidies, as defined in Minnesota Statutes I 16J.993, Subdivision 3, for private development. This criteria shall be used as a guide in processing and reviewing applications requesting business subsidies. 1 :02 The criteria set forth in this document are guidelines only. The Housing and Redevelopment Authority reserves the right in its discretion to approve business subsidies that vary from the criteria stated herein if the Housing and Redevelopment Authority determines that the subsidy nevertheless serves a public purpose. The Authority will file evidence of any deviation from these criteria with the Department of Trade and Economic Development in accordance with Minnesota Statutes, Section 116J.994, Subd. Z. I :03 The Housing and Redevelopment Authority may amend the business subsidy criteria at any time. Amendments to these criteria are subject to public hearing requirements pursuant to Minnesota Statutes, Sections 116J.993 through 116J.994. 2. STATUTORY LIMITATIONS 2:01 In accordance with the Business Subsidy Criteria, Business Subsidy requests must comply with applicable State Statutes. The Housing and Redevelopment Authority ability to grant business subsidies is governed by the limitations established in Minnesota Statutes 116J.993 through 116J.994. , 1 . . 4:04 . , .J. 3:01 4. 4:01 4:02 4:03 4:05 4:06 HRA Business Subsidy Criteria PUBLIC POLICY REQUIREMENT All business subsidies must meet a public purpose in addition to increasing the tax base. Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable. BUSINESS SUBSIDY APPROVAL CRITERIA All new projects approved by the Housing and Redevelopment Authority should meet the following minimum approval criteria. However, it should not be presumed that a project meeting these criteria will automatically be approved. Meeting these criteria creates no contractual rights on the part of any potential developer or the Housing and Redevelopment Authority. The project must be in accord with the Comprehensive Plan and Zoning Ordinances, or required changes to the plan and ordinances must be under active consideration by the City at the time of approval. Business subsidies will not be provided to projects that have the financial feasibility to proceed without the benefit of the subsidy. In effect, business subsidies will not be provided solely to broaden a developer's profit margins on a project. Prior to approval of a business subsidies financing plan and when deemed appropriate by the Housing and Redevelopment Authority, the developer shall provide any required market and financial feasibility studies, appraisals, soil boring, information provided to private lenders for the project, and other information or data as requested. A recipient of a business subsidy must make a commitment to continue operations at the site where the subsidy is used for at least five years after the benefit date. The Housing and Redevelopment Authority may determine after a public hearing that job creation or retention is not a goal of the subsidy. In those cases, the recipient must instead meet at least one of the following minimum requirements (in addition to all other criteria in this document other than those relating to jobs and minimum wages): A. The proposed subsidy must accomplish removal, rehabilitation or redevelopment of "blighted areas" as defined in Minnesota Statutes, Section 469.002, Subd.ll, or must constitute a cost of correcting conditions that allow designation of redevelopment districts under Minnesota Statutes, Sections 469.174 to 469.179; or B. The proposed subsidy must result in improvements to public infrastmcture or public facilities, including without limitation, sewers, storm sewers, streets, parks, recreational facilities, and other City facilities; or 2 . . . 4:07 5. 5:01 5:02 5:03 HRA Business Subsidy Criteria C. The proposed subsidy must remove physical impediments to development of land, including without limitation poor soils, bedrock conditions, steep slopes, or similar geotechnical problems. For any business subsidy that does not meet the requirements of Section 4:06, the recipient must create or retain jobs as determined by the Housing and Redevelopment Authority, and must meet the minimum wage thresholds described in Section 5:03C or D (whether or not the source of the subsidy is tax increment financing). TAX INCREMENT PROJECT EV ALVA TION CRITERIA The Housing and Redevelopment Authority will utilize Tax Increment financing to support the community's long-term economic, redevelopment, and housing goals. Each Tax Increment Financing subsidy will be analyzed and evaluated by the Housing and Redevelopment Authority. Each project shall be measured against the general criteria in Sections I through 6 and the specific criteria in this Section 5 applicable to tax increment financing business subsidies. Following are the evaluation criteria that will be used by the Housing and Redevelopment Authority. A. All business subsidy requests shall meet the "but for" test. The "but for" test means that the project would not develop solely on private investment in the reasonable future. The developer shall provide findings for the "but for" test. B. Business subsidy requests should create the highest feasible number of jobs on site from date of occupancy where deemed appropriate. c. For manufacturing and warehousing business subsidy requests, at least 90% of the jobs created must pay a wage of the higher of $9.00 per hour, or at least 160% of the federal minimum wage requirement for individuals over the age of20. In the case of a recipient with existing jobs, the Authority may determine that the wage goal is satisfied if wages are increased to at least the minimum specified in this paragraph. Annual written reports are required until termination date. Failure to meet the job and wage level goals require partial or full repayment of the assistance with interest. D. For other business subsidy requests, jobs created must meet as a minimum the federal minimum wage requirement. In the case ofa recipient with existing jobs, the Authority may determine that the wage goal is satisfied if wages are increased by a specified amount over the federal minimum wage. Annual written reports are required until termination date. Failure to meet the job and wage level goals require partial or full repayment of the assistance with interest. ~ ~ . . . HRA Business Subsidy Criteria E. All business subsidy requests should create the highest possible ratio of property taxes paid before and after redevelopment. F. Business subsidy requests should facilitate redevelopment or elimination of "substandard" or "blighted" areas where deemed appropriate. G. Business subsidy requests should facilitate the "clean-up" of environmentally unsound property where deemed appropriate. H. Business subsidy requests should increase moderate priced housing options for area residents where deemed appropriate. 1. All business subsidy requests should be deemed to promote additional desired "spin-off' development. J. All business subsidy requests should demonstrate "community involvement" including demonstrated degrees of the various factors: a) Local residency of the company's owners and employees, or b) Local residency of the contractors involved in the project, or c) Membership in local business organizations, or d) Other similar factors. 6. PROCEDURES . Meet with appropriate Staff to discuss the scope of the project, public participation being required, and other information as may be necessary. . The request shall be reviewed by Staff on a preliminary basis as to the feasibility of the project. . The project concept shall be placed on the Housing and Redevelopment Authority agenda for concept review. The applicant will make a presentation of the project. Staff will present its findings. . [fthe Housing and Redevelopment Authority's concept review is positive, Staff will provide the city Council with an informational concept review. . The applicant will execute and submit the Preliminary Development Agreement accompanied by a non-refundable fee of$7,500 or submit the Preliminary Development Agreement for the Monticello Business Center accompanied by a non-refundable fee of $10,000. . Building and site plans submitted to the Chief Building Official. 4 . . . HRA Business Subsidy Criteria . If Planning and Zoning Commission action is required, it will be necessary for the applicant, at this time, to make application to the Commission. . Staff will authorize the following steps: - Preparation for establishment of the Tax Increment Finance District and the Tax Increment Financing Plan if required. - Preparation of the Private Redevelopment Contract (Subsidy Agreement) based upon agreed terms. . When action is required for the Tax Increment Finance Plan, Private Redevelopment Contract, or Zoning/Ordinance; the Housing and Redevelopment Authority, Commission, and City Council shall take appropriate action such as public hearings and consideration of approvals. . Building permit issued after the Tax Increment Finance District and Plan is approved by City Council, the Private Redevelopment Contract is executed by the developer and the Housing and Redevelopment Authority, and the Building Permit Fees are paid. Eligible Tax Increment Finance expenditures: Land acquisition, site improvements, public improvements, and demolition and relocation costs. Tax Increment Finance time: Generally six to eight weeks from time of authorization to begin drafting plan and contract. Zoning/Ordinance time: Varies per project. 5 . . . Section I. Section 2. Section 3. Section 4. Section 1. Section 2. AMENDED BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF MONTICELLO, MINNESOTA ARTICLE I THE AUTHORITY Name of Authority. The name of the Authority shall be the "Housing and RedeYelopment Authority in and for the City of Monticello, Minnesota." Seal of Authority. The seal of the Authority shall be in the form of a circle and shall bear the name of the Authority and the year of its organization. Office of the Authority: Place of Meeting. The office of the Authority shall be at such place in the city of Monticello, Minnesota, as the Authority may from time to time determine by resolution. Regular and special meetings of the Board of Commissioners shall be open to the public and shall be held in Monticello City Hall at 505 Walnut Street, Suite #1, Monticello, Minnesota; proyided, however, that upon three days written notice to the Commissioners of the place of such meeting, any regular or special meeting may be held at such place within the city of Monticello as the notice shall designate. Powers of the Authority. The Authority, by and in its corporate name, shall haye and exercise all powers, functions, rights, and privileges pursuant to Minnesota Statutes 469.001, et seq. ARTICLE II COMMISSIONERS Authority. The business and affairs of the Authority shall be managed by or under the authority of the Board of Commissioners, except as otherwise permitted by statute. Number. Qualification, and Term of Office. There shall be five Commissioners appointed by the Mayor of Monticello and approyed by the City Council. Commissioners shall be natural persons, at least 18 years of age, and must reside in the city of Monticello. Commissioners shall serve a term of fiye years with one Commissioner's term expiring each year. DAWNiWORD\OLLlE\BYLAWS.HRA: 4/3/02 Page 1 ~.~-t,o tL--~. . Steve -The Monticello HRA met last night (April 11, 2007) and passed a motion to withdraw their offer on the Kathy Froslie property. The HRA is no longer interested in the parcel and are looking at a different direction. The HRA and myself thank both you and Kathy for your time and consideration. Ollie Ollie Koropchak rom: ont: Cc: Subject: Ollie, conroylaw@tds.net Tuesday, April 10, 2007 2:25 PM Ollie Koropchak dfrie@wrightsherburnerealty.com Kathy Froslie I received a phone call from Kathy Froslie wondering whether HRA latest offer. I told her that I believed that HRA met recently her an update. What is the current status of this matter? Sincerely, had a response to her and that I would provide Stephen R. Conroy . . . Section 3. Section 4. Section 1. Section 2. Section 3. Section 4. Vacancies. Vacancies on the Board of Commissioners occurring by reason of death. resignation. removal, or disqualification shall be filled for the unexpired term by the Mayor in accordance with the procedures set forth in Article II, Section 2. Removal. For inefficieney or neglect of duty, or misconduct in office, a Commissioner may be removed from office by the City Council in aceordance with Minnesota Statute 469.010. ARTICLE III OFFICERS Offieers. The Offieers of the Authority shall consist of a Chair, Viee-Chair, and a Secretary- Treasurer. The Chair and Vice-Chair shall be elected from among the Commissioners. A Commissioner shall not hold more than one of the above-named offices at the same time. The Secretary-Treasurer shall be appointed by the Commissioners. Chair. The Chair shall preside at all meetings of the Board of Commissioners if present. Except as otherwise authorized by resolution of the Board of Commissioners, the Chair shall sign all contracts, deeds, and other instruments made by the Authority. At each meeting. the Chair shall submit such recommendations and information as eonsidered proper concerning the business, affairs, and policies of the Authority. Exeept as otherwise provided by resolution of the Board of Commissioners. all such orders and checks shall be counter-signed by the Chair. Vice-Chair. The Vice-Chair shall perform the duties of the Chair in the absence or incapacity of the Chair; and in case of resignation or death of the Chair, the Vice-Chair shall perform such duties as are imposed on the Chair until such time as the Board of Commissioners shall select a new Chair. If in the event a quorum is present and the Chair and Vice-Chair are absent or unable to attend a meeting of the Board of Commissioners. The three remaining members shall elect from among the remaining Commissioners a Chair for the said meeting. Secretarv-Treasurer. The Secretary-Treasurer shall perform the duties of the office of Secretary-Treasurer. The Secretary-Treasurer may delegate the responsibility for recording the Minutes of the Board of Commissioner meetings to the Executive Director or to the Authority Office Secretary as is determined appropriate by the Secretary- Treasurer. The Secretary-Treasurer shall sign all orders and checks for the payment of money and shall payout and disburse such moneys under the direction of the Authority. DAWNI'NQRo\OllIE\BYLAWS.HRA: 4/3/02 Page 2 . . . Section 5. Additional Duties. The Officers of the Authority shall perform such other duties and functions as may from time to time be required by the Authority or the bylaws or rules and regulations of the Authority. Section 6. Election or Appointment. The Chair and Vice-Chair shall be elected at the annual meeting of the Board of Commissioners from among the Commissioners of the Authority and shall hold office for one year or until their successors are elected and qualified. The Secretary-Treasurer shall be appointed at the annual meeting of the Board of Commissioners by the Commissioners. Section 7. Vacancies. Should the office of the Chair, Vice-Chair, or Secretary-Treasurer become vacant, the Board of Commissioners shall elect a successor from its members at the next regular meeting, and such election shall be for the unexpired term of said office. ARTICLE IV EXECUTIVE DIRECTOR The Authority shall employ an Executive Director who shall have general supervision over the administration of its business and atTairs, subject to the direction of the Board of Commissioners. As assistant to the Secretary-Treasurer, the Executive Director shall ensure that proper records of the Authority are maintained. The Executive Director (or designee) shall act as Secretary of the meeting of the Board of Commissioners and shall keep a record of the proceedings in a journal of proceedings to be kept for such pLlrposes (the minutes 0 f the proceedings are to be signed by the recorder plus the Authority Commissioner acting as Chair at the meeting). The Executive Director shall perform all duties incident to rhe Executive Director position as may be assigned by the position description as approved by the Board of Commissioners. The Executive Director shall keep in safe custody the seal of the Authority and shall have the power to affix such seal to all contracts and instruments authorized to be executed by the Authority. The Executive Director shall have the care and custody ofal! funds of the Authority and shall deposit the same in the name of the Authority in such bank or banks as the Board of Commissioners may select. The Executive Director shall be charged with the management of the housing projects of Authority. The Executive Director shall keep regular books of accounts showing receipts and expenditures and shall render to the Board of Commissioners, at each regular meeting (or more often when requested), an account of his/her transactions and also of the financial condition of the Authority. The Executive Director shall give such bond of the faithful performance of duties as the Board of Commissioners may determine. DAWN:WQRD\OLlIE\BYlAWS,HRA: 4/3/02 Page 3 The Execlltive Director shall be appointed by the Board ot'Commissioners. Any person appointed to fill the ot'lice ot' Executive Director. or any vacancy therein. shall have such term as the Board ot' Commissioners tixes. but no Commissioner ofthc Board ot'Commissioners shall be eligible to this oftice. When the office of Executive Director becomes vacant, the Board ot' Commissioners shall . appoint a Sllccessor, as aforesaid. So long as the Executive Director is an employee of and paid by the City, the Executive Director's compensation will be determined in accordance with City compensation policies and procedures provided that the Board of Commissioners shall at least anmtally review the pert'ormance of the Executive Director and make recommendations to the City regarding that person's compensation. If the Executive Director is not an employee of the City but is independently retained by the Authority, the Board of Commissioners shall establish the compensation of the Executive Director. ARTICLE V ADDITIONAL PERSONNEL The Board ot'Commissioners may from time to time employ such personnel as it deems necessary to exercise its power, duties, and flmctions as prescribed by the :\IlLmicipal Housing and Redevelopment Law of Minnesota applicable thereto. The selection of such personnel (including the Executive Director) shall be determined by the Board of Commissioners subject to the laws of the State of Minnesota. In cases where such personnel are employees of and paid by the City, such persons' compensation will be determined in accordance with City compensation policies and procedures, provided that the Board of Commissioners shall at least annually review the performance ot'the personnel and make recommendations to the City regarding such persons' compensation. [fany personnel are not employees of the City but are independently retained by the Authority, the Board of Commissioners shall establish the compensation of such personnel. . Section I. Section 2. . ART[CLE V[ MEETINGS Annualll;[eeting. The annual meeting of the Board of Commissioners shall be held on the tirst Wednesday of April at 6 p.m. at the regular meeting place of the Board of Commissioners; provided, however, that the date/time of the annual meeting may be postponed to a subsequent date/time upon the vote of a majority of Commissioners in office at any time taken at any regular or special meeting. Regular Meetinl!s. Monthly meetings shall be held without notice at the regular meeting place ot'the Board of Commissioners on the first Wednesday of each month at 6 p.m. unless the same shall be a legal holiday, in which event said meeting shall be held on the next succeeding secular day. [n the event the date/time/meetings place of a particular meeting must be changed, the Chair may make such change deemed necessary by notifying all Commissioners by delivering (by staft) a notice to their home address at any time prior to the meeting or mailing a notice to the business or home address at least three (3) working days prior to the date of such regular meeting. DAWNfllVORD\OlLlE\BYLAWS.HRA: 4/3/02 Page 4 . . . Section 3. Special Meetin'-!s. Special meetings of the Board of Commissioners may be called by the Chair or two members of the Board of Commissioners for the purpose of transacting any business designated in the call. The call (including location of meeting) for a special meeting may be delivered at any time prior to the time of the proposed meeting to each member of the Board of Commissioners or may be mailed to the business or home address of each member of the Board of Commissioners at least three (3) working days prior to the date of such special meeting. At sllch special meeting, no business shall be considered other than as designated in the call; but if all of the members of the Authority are present at aspecial meeting, any and all business may be transacted at such special meeting. Notice of any special meeting shall be given in accordance with MinnesotaStatutes, Section 471.705, subd. Ic, or any successor statute regarding notice of meetings of public bodies. ARTICLE VII QUORUM The powers of the Authority shall be vested in the Commissioners thereof in office from time to time. Three Commissioners constitute a quorum (except as noted below) for the purpose of conducting its business and exercising its powers and for all other purposes, but a smaller number may adjourn from time to time until a quorum is obtained. When a quorum is in attendance, action may be taken by the Board of Commissioners upon a vote ofa majority of the Commissioners present (except as noted below). Exception: In regard to action on the annual Authority operating budget, or revisions thereto, there must be at least four Commissioners present, and the majority of those present must vote in favor of such for the matter to be approved. ARTICLE VI!I ORDER OF BUSINESS Section I. Order of Business. At the regular meetings of the Board of Commissioners, the following shall be the Order of Business: I. Roll call 2. Reading and approval of minutes of the previous meeting 3. Items not contained in the agenda 4. New business 5. Bills and communications 6. Project update by Executive Director 7. Other Business 8. Adjournment All resolutions shall be in writing and shall be copied in the journal of the proceedings of the Board of Commissioners. DAWNIWQRmOlLiE\BYLAWS HRA: 4/3/02 Page 5 . . . ARTICLE IX MANNER OF VOTING The voting on all questions coming before the Board of Commissioners shall be by roll call, and yeas and nays shall be entered upon the minutes of such meeting. The Chair and all members of the Board of Commissioners at every meeting of said Board of Commissioners shall be entitled to a vote. In the event that any Commissioners shall have a personal interest of any kind in a matter then before the Board of Commissioners, the Commissioners shall disclose his/her interest and be disqualified from voting upon the matter, and the Secretary shall so record in the minutes that no vote was cast by said Commissioner. ARTICLE X EXECUTION OF CONTRACTS All contracts, notes, and other written agreements or instruments to which the ALlthority is a party or signatory or by which the Authority may be bound shall be executed by the Chair and Executi ve Director. If the Executive Director is absent or otherwise unable to execute a document, the Secretary- Treasurer may execute the document. ARTICLE Xl AMENDMENTS The bylaws of the Board of Commissioners shall be amended by ResolLltion only with the approval of at least a majority of the Commissioners in office at any time. These bylaws were adopted as the bylaws of the Authority by the Board of Commissioners on July 8, ]997. These bylaws were adopted as the bylaws of the Authority by the Board of Commissioners on September 2, 1998. These bylaws were amended as the bylaws of the Authority by the Board of Commissioners on June 7, 2000. These bylaws were amended as the bylaws of the Authority by the Board of Commissioners on April 3, 2002. DAWN/WORmOLUE\BYLAWS.HRA: 413f02 Page 6 . . . 10. BRA Agenda - 04/11/07 Consideration of an update on the Como Plan (downtown) and discussion of Froslie purchase offer. Comp Plan meeting in March dealt with the downtown camp plan. Perhaps either one of the HRA representatives (Frie or Fair) can give the HRA an update. Otherwise, maybe Angela. FROSLlE'S PROPERTY I've attached the e-mails from HRA commissioners who responded to Kathy's comments of the HRA offer make in February 2007. For discussion: Comp Plan update and Froslie and Garden Center properties. FEB.23'2007 10:44 763 295 6666 LAW OFFICE #0519 P.003/003 a2/23/2667 11:26 13523575326 RIVERSIDE NB PAGE a1 tf\~1I1'. ,- ./ftJ;j'" o(,~- ..,lfc.b . 4Th ~~~OY LAW OFFICE, Ltd. 26\ Eul Bt'OadwllY 1'.0.11..999 )I""liodlo. MN ~J:!6Z (763) 295-61)67 r.1epf<<l.' I)ltII 2~.... Emlril: eoMOl'I""'.,6...... FebIuary 9, 2007 MicluIel and Kathleen Fwslie 204 Lake Drive Big Stone City, SD S721f.i J)eaJ; Michael and Kathleen: 1.d-tr (PI:J .~11-~'3 . T beard back from. the HRA regardina . po8Si.ble plJrcbsse of your property. They reiterated. their previous offer of $327,789.00 but, i" addi1ior:t. sre willms to con3idcr your use of the property for 2 or 3 YeaJ'$ after the sale rent.fiee. The Springborg property was sold, so i.t is no longer avaiJeblc to BRA. They are now looking at other options to IlUJ'ChllSe property lbr poIIeIllial re-de\ll!Jopment as 8lI altemative to your jH.upo;;lty. A ~~ Let me know if you are, iut.......,;b;;d in the above: offer. r~: We. hAVe,. C~ ' ,,-O!.. 7S~ aoo Slncm:ly, SRCIbV Cc:~ DkO-1'r..... 1"/.h... Ccs-,..J."':'\l--,' .) ;,0.-./3. ;) , ~.... I4IJ ~ ~.(.:..., ,-i<. II; I~ ,0. p Q... ~.. ,:,vO} 0" ~.,,' ':is; ,... o-J-.. C' ~f.V;~ v...t~ v..>~~ if' Q . j.-^-~ ofJb.A-. c~_ (t" . -, ~ fV'1;) +A- f. <<') - l.d"'W......~ o' ~ ~ ~ Uew ~l. 't""~ ~1Vr\ '. i -,. " ..s:A\OU' . - p F 1Goro~ . ., "" 1'7 l.\.tir..~ \'I ~~, .... &... no Ollie Koropchak ADm: 'lIIIIIfent: To: Subject: -,/ :~ \ ,.~~ (// Dan Frie [dfrie~rigt\tsherburnerealty.com] '----Friday, Febwary23, 2007 3:03 PM Ollie Koropchak RE: Scanned image from MontiCityHallMX-2700 ~t::nk that location is the best place for an HRA assisted redevelopment project in the ! ( specified for our attention) 4-block downtown area.My thought would be a seniors, owner occupied, condo 3-story with main level retail and underground parking. Both the downtown and the local housing market could use a boost.However, without the Springborg property it would be a problern.I would come close to their price and 1 year seller holdback, if we had both parcels tied up. ':':-:-=-':"Original Message----- From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Friday, February 23, 2007 1:29 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.rnn.us Subject: FW: Scanned image from MontiCityHallMX-2700 PLEASE READ THE ATTACHED AND RESPOND BY MARCH 2 UNTIL APRIL 11'~cT~~ WILL ALLOW ME TO GET BACK VACATION STARTS'~3. THANKS. OLLIE -----Original Message----- From: Administrator Sent: Friday, February 23, 2007 12:37 PM To: Ollie Koropchak ~ubject: Scanned image from MontiCityHallMX-2700 ~ePIY to: administrator@ci.monticello.mn.us <administrator@ci.rnonticello.mn.us> Device Name: MontiCityHallMX-2700 Device Model: MX-2700N Location: Monticello City Hall AS THE HRA WILL NOT MEET TO CONROY BEFORE MY File Format: PDF MMR(G4) Resolution: 200dpi x 200dpi Attached file is scanned image in PDF format. Use Acrobat (R)Reader4.0 or later version, or Adobe (R) Reader (TM) of Adobe Systems Incorporated to view the document. Acrobat(R)Reader4.0 or later version, or Adobe(R) Reader (TM) can be downloaded from the following URL: Adobe, the Adobe logo, Acrobat, the Adobe PDF logo, and Reader are registered trademarks or trademarks of Adobe Systems Incorporated in the United States and other countries. http://www.adobe.com/ . 1 Ollie Koropchak &om: 1IIIIIIfent: To: Subject: Barger, Brad D. [bbarger@gosuburban.com] Friday, February 23, 2007 4:18 PM Ollie Koropchak; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william .fair@state.mn.us RE: Scanned image from MontiCityHallMX-2700 If we had the Froslie property and not the Springboard is there still enough area to do a project with Steve Johnson? If there is maybe we are getting closer to reality if there are no relocation costs etc. If not I think our offer should stand. Brad -----Original Message----- From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Friday, February 23, 2007 1:31 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.mn.us Subject: FW: Scanned image from MontiCityHallMX-2700 PLEASE READ THE ATTACHED AND RESPOND BY MARCH 2 AS UNTIL APRIL 11. ~~~~ WILL ALLOW ME TO GET BACK TO VACATION STARTS ~3. THANKS. OLLIE -----Original Message----- From: Administrator Sent: Friday, February 23, 2007 12:37 PM To: Ollie Koropchak Subject: Scanned image from MontiCityHallMX-2700 ~ply to: adrninistrator@ci.monticello.mn.us ~dministrator@ci.rnonticello.mn.us> Device Name: MontiCityHallMX-2700 Device Model: MX-2700N Location: Monticello City Hall THE HRA WILL NOT MEET CONROY BEFORE MY File Format: PDF MMR(G4) Resolution: 200dpi x 200dpi Attached file is scanned image in PDF format. Use Acrobat(R)Reader4.0 or later version, or Adobe (R) Reader (TM) of Adobe Systems Incorporated to view the document. Acrobat(R)Reader4.0 or later version, or Adobe (R) Reader (TM) can be downloaded from the following URL: Adobe, the Adobe logo, Acrobat, the Adobe PDF logo, and Reader are registered trademarks or trademarks of Adobe Systems Incorporated in the United States and other countries. http://www.adobe.com/ . / I 1 "" -."--... Ollie Koropchak -- ~ Lahr, Darri F [darrin.f.lahr@xcelenergy.com] "-S y, February 24, 20074:34 PM Ollie Koropchak; Barger, Brad D.; SIeve Andrews; dfrie@wrighlsherburnereally.com; william.fair@stale.mn.us RE: Scanned image from MonliCilyHallMX-2700 &om: -.rent: To: Subject: ~- Ghat seems fairly realistic maybe we should counter with a years.? 440? It does get us out of relocation. ....hrnmmmm. 15 " are we? -----Original Message----- From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Friday, February 23, 2007 1:29 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.mn.us Subject: FW: Scanned image from MontiCityHallMX-2700 lower figure and offer 2 ....\ How much above "greenfield~' PLEASE READ THE ATTACHED AND RESPOND BY MARCH 2 AS THE HRA WILL NOT MEET UNTIL APRIL 11. THIS WILL ALLOW ~~JO GET BACK TO CONROY BEFORE MY VACATION STARTS ~3. THANKS. OLLIE -----Original Message----- From: Administrator Sent: Friday, February 23, 2007 12:37 PM To: Ollie Koropchak Subject: Scanned image from MontiCityHallMX-2700 ~PlY to: administrator@ci.monticello.mn.us <administrator@ci.monticello.rnn.us> ~vice Name: MontiCityHal1MX-2700 Device Model: MX-2700N Location: Monticello City Hall File Format: PDF MMR(G4) Resolution: 200dpi x 200dpi Attached file is scanned image in PDF format. Use Acrobat (R)Reader4.0 or later version, or Adobe (R)Reader(TM) of Adobe Systems Incorporated to view the document. Acrobat(R)Reader4.0 or later version, or Adobe (R) Reader (TM) can be downloaded from the following URL: Adobe, the Adobe logo, Acrobat, the Adobe PDF logo, and Reader are registered trademarks or trademarks of Adobe Systems Incorporated in the United States and other countries. http://www.adobe.com/ . 1 Page 1 of 1 . Ollie Koropchak From: (B~rger,~~~~[bbarger@gOSUburban.comJ Monday, February 26, 2007 4:29 PM Ollie Koropchak; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william .fair@state.mn.us Cc: conroylaw@tds.net Subject: RE: fROSLlE PROPERTY ~ If she leased this building from us for two years and sub let to others with the lease's expiring before we w~ raze or do something with it why wouid there be relocation when there would not be any tenants? Also I'm still not I clear to the possibilities of doing a project with out the other mid block properties assuming Steve would participate. . Thanks Brad Sent: To: . From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Monday, February 26, 2007 4:01 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.mn.us Cc: conroylaw@tds.net Subject: fROSLIE PROPERTY THANKS TO THE THREE WHO RESPONDED TO THE FROSLlE OFFER. JUST TO CLARIFY ONE THING, IT'S MY UNDERSTANDING THAT BASICALLY NOTHING GETS THE HRA OUT OF OFFERING RELOCATION BENEFITS. CONROY SHOULD BE ABLE TO CONFIRM THIS OR APPROACH AN OFFER WITH LEGALITY. THE TOTAL SO FT OF THE HRAAND JOHNSON CORNER LOT ON THE SOUTH SIDE IS APPROXIMATELY 20,590 AND FROSLlE ABOUT THE SAME. ONE THING, I'M NOT SURE IF THE ALLEY IS A RECORDED EASEMENT FOR ACCESS FROM HIGHWAY 25. I'M SURE MINNDOT WOULD LOVE TO CLOSE BUT THE BUSINESSES PROBABLY NOT AND ALSO DEPENDS WHAT HAPPENS IN THE FUTURE WITH RIVER STREET/HIGHWAY 25 SIGNAL. ANYMORE FEEDBACK. OLLIE 2/26/2007 . Page 1 of 1 . Ollie Koropchak From:-::.pah'FrieJ9frie@wri9htsherburnerealty,comj ~~'_"__ m"'''.- Sent: Tuesday, February 27, 2007 12:21 PM To: Ollie Koropchak Subject: RE: fROSLlE PROPERTY "'- \lreCently received a call from Leslie (Cedar street Garden Center) , she said she wants to make a presentation~ ~e HRA on her property (1 + acre), Maybe we should have an overall discussion on redevelopment downtown,~ -----Original Message--m From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Monday, February 26, 2007 3:47 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.mn.us Cc: conroylaw@tds.net Subject: fROSLIE PROPERTY ~.,~ ) , . THANKS TO THE THREE WHO RESPONDED TO THE FROSLlE OFFER JUST TO CLARIFY ONE THING, IT'S MY UNDERSTANDING THAT BASICALLY NOTHING GETS THE HRA OUT OF OFFERING RELOCATION BENEFITS, CONROY SHOULD BE ABLE TO CONFIRM THIS OR APPROACH AN OFFER WITH LEGALITY, THE TOTAL sa FT OF THE HRA AND JOHNSON CORNER LOT ON THE SOUTH SIDE IS APPROXIMATELY 20,590 AND FROSLlE ABOUT THE SAME. ONE THING, I'M NOT SURE IF THE ALLEY IS A RECORDED EASEMENT FOR ACCESS FROM HIGHWAY 25. I'M SURE MINNDOT WOULD LOVE TO CLOSE BUT THE BUSINESSES PROBABLY NOT AND ALSO DEPENDS WHAT HAPPENS IN THE FUTURE WITH RIVER STREET/HIGHWAY 25 SIGNAL. ANYMORE FEEDBACK. OLLIE clJ <\; IJJ ~ . 2/27/2007 Page 1 of 1 . Ollie Koropchak _.,::-~:.-:: .,.--, ""","".-< \' . (/Fl"O~0Lah;, Dar;idF [darrin.f.lahr@Xcelenergy.com] "serlt: Tues~ebruary 27, 20078:59 AM To: Barger, Brad D.; Ollie Koropchak; Steve Andrews; dfrie@wrlghtsherburnerealty.com; william.fair@state.mn.us Cc: conroylaw@tds,net Subject: RE: fROSLlE PROPERTY ~ \ The rate of change in this area on its own will be never. We probably will not be able to get any type of \ decent return on a current project here and in my mind we are doing more of the slow acquistion for a \ future need and thus being in better shape to help make things happen. Basically we are buying so that a ~e project can happen- whatever it is. We need to know about reloction. -----Original Message----- From: Barger, Brad D. [mailto:bbarger@gosuburban.com] Sent: Monday, February 26, 2007 4:29 PM To: Ollie Koropchak; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william.fair@state.mn.us Cc: conroylaw@tds.net Subject: RE: fROSLIE PROPERTY . If she leased this building from us for two years and sub let to others with the lease's expiring before we would raze or do something with it why would there be relocation when there would not be any tenants? Also I'm still not clear to the possibilities of doing a project with out the other mid block properties assuming Steve would participate. Thanks Brad From: Ollie Koropchak [mailto:Ollie.Koropchak@ci.monticello.mn.us] Sent: Monday, February 26, 2007 4:01 PM To: Barger, Brad D.; Steve Andrews; Lahr, Darrin F; dfrie@wrightsherburnerealty.com; william. fair@state.mn.us Cc: conroylaw@tds.net Subject: fROSLIE PROPERTY THANKS TO THE THREE WHO RESPONDED TO THE FROSLlE OFFER. JUST TO CLARIFY ONE THING, IT'S MY UNDERSTANDING THAT BASICALLY NOTHING GETS THE HRA OUT OF OFFERING RELOCATION BENEFITS. CONROY SHOULD BE ABLE TO CONFIRM THIS OR APPROACH AN OFFER WITH LEGALITY. THE TOTAL SO FT OF THE HRA AND JOHNSON CORNER LOT ON THE SOUTH SIDE IS APPROXIMATELY 20,590 AND FROSLlE ABOUT THE SAME. ONE THING, I'M NOT SURE IF THE ALLEY IS A RECORDED EASEMENT FOR ACCESS FROM HIGHWAY 25. I'M SURE MINNDOT WOULD LOVE TO CLOSE BUT THE BUSINESSES PROBABLY NOT AND ALSO DEPENDS WHAT HAPPENS IN THE FUTURE WITH RIVER STREET/HIGHWAY 25 SIGNAL. ANYMORE FEEDBACK. OLLIE . 2/27/2007 Ollie Koropchak *-om: 1IIIII!'ent: To: Subject: wU [wfair@doc.state.mn.us] Tuesday, February 27, 2007 11 :53 AM Ollie Koropchak Re: fROSLlE PROPERTY T Ollie r 11m not in favor of changing our off on this property. If we start at that / p~ices for adjoining parcels I believe are going to be even more inflated. ~nch marks earlier and I believe we should adher to them. Bill >>> "Ollie Koropchak" <Ollie.Koropchak@ci.rnonticello.rnn.us> 2/26/2007 3:47 PM >>> THANKS TO THE THREE WHO RESPONDED TO THE FROSLIE MY UNDERSTANDING THAT BASICALLY NOTHING GETS THE OF OFFERING RELOCATION BENEFITS. CONROY SHOULD THIS OR APPROACH AN OFFER WITH LEGALITY. THE TOTAL SQ FT OF THE HRA AND JOHNSON CORNER LOT ON THE SOUTH SIDE IS APPROXIMATELY 20,590 AND FROSLIE ABOUT THE SAME. ONE THING, I'M NOT SURE IF THE ALLEY IS A RECORDED EASEMENT FOR ACCESS FROM HIGHWAY 25. I'M SURE MINNDOT WOULD LOVE TO CLOSE BUT THE BUSINESSES PROBABLY NOT AND ALSO DEPENDS WHAT HAPPENS IN THE FUTURE WITH RIVER STREET/HIGHWAY 25 SIGNAL. ANYMORE FEEDBACK. OLLIE (-. ~,-.._~ price the J we set some OFFER. HRA OUT BE ABLE JUST TO CLARIFY ONE THING, IT'S TO CONFIRM . . 1 Page 1 of 1 . Ollie Koropchak From: Ollie Koropchak Wednesday, February 28,20072:13 PM 'conroylaw@tds.net' 'Barger, Brad D.'; Steve Andrews; 'Lahr, Darrin F'; dfrie@wrightsherburnerealty.com; 'william .fair@state.mn.us' Subject: Froslie offer ~:nroy - See you will be out of the office March 8 through 25. Since I've received several questions and , thoughts about the Froslie HRA offer of $327,789, 2-3 years rent free and her counter-offer of $500,000 and stay I, 3 years, I believe it is best for the HRA to discuss the offer at their next meeting on April 11, 2007. '\, Commissioners - Other downtown items to consider in April: Follow-up of Comp Plan Task meeting of March 15 which will discuss downtown. Leslie (Cedar Street Garden Center) request to make a presentation to the HRA. If ) HRA purchases any property, the choice is demolish or not demolish? Remember a redevelopment TIF district : must be inspected for substandard qualification. We can declare for future redevelopment, complete inspection and adopt appropriate resolution; however, the time clock is a three year window of opportunity. Next, I believe the HRA would need to assist with tenant relocation. Remember, Barry's Cub's Food project? Lastly, at site review, it appears there is an alley easement which certainly can be vacated but without resistance I'm not sure. Another thing John Simola noted is the storm sewer line runs in the alley along the easterly one-half of the block. Doesn't mean it couldn't be relocated but certainly can not construct building over the top. Sent: To: Cc: Thanks everyone for your comments. Thanks. Ollie "':/ . . 2/28/2007 Ollie Koropchak a.om: 'lIIII!ent: To: Subject: Todd Hagen [THagen@ehlers-inc.com] Monday, March 05, 2007 11 :32 AM Ollie Koropchak Monticello HRA - Downtown Building... x Hi Ollie: On your relocation benefit question. Ask Steve if a simple waiver could be added to your lease to avoid paying tenant relocation benefits. On your duration question. The limitation on establishing a redevelopment TIF district after demolition or removal of a substandard building is within three years of the filing of the request for certification. Remember that the substandard building needs to be demolished or removed by the authority or the demolition or removal financed by the authority or done by a developer under a development agreement with the authority. Also, the authority must find by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building and that after demolition and clearance the authority intended to include the parcel within a district. I hope I answered your questions. Todd. Todd Hagen, CIPFA Public Finance Advisor VP, Ehlers & Associates, Inc. 3060 Centre Pointe Drive Rosevi11e, MN 55113 Direct: (651) 697-8508 Mobile: (612) 961-9131 Fax: (651) 697-8555 Toll Free: (800) 552-1171 thagen@ehlers-inc.com ~is e-mail and any attachments may contain information which is privileged or ~~nfidential. If you are not the intended recipient, note that any disclosure, copying, distribution or use of the contents of this message is prohibited. If you have received this e-mail in error, please destroy it and notify us immediately by return e-mail or at our telephone number, 651-697-8500. Any views or opinions presented in this e-mail are solely those of the author and may not represent the views or opinions of Ehlers & Associates, Inc. This email has been scanned for all viruses by the MessageLabs Email Security System. . 1 . . . 11. Consideration to authorize Davment of the BRA bills. Recommendation to is authorize payment of bills. 1 BRA Agenda - 04/11/07 ~ ~"~~"~OY LAW OFFICE, Ltd. CLI~%)l'''jl~~~ HRA c/o Ollie Koropchak ADDRESS: City of Monticello 505 Walnut Street Monticello, MN 55362 BILLING PERIOD: March-07 DATE 31112007 ACTIVITY E-mails from HRA; Call from Fraslle ~c~~ :1)..\"0 S ?- r::L I L-\ \a - VI ~D 'I 0_ L\- 'J ~ 'Y V..'J.- ,,\~y L,o\J.- . TOTAL HOURS: 0.3 0.3 Hours times $150.00 per hour = $ 45.00 Amount owed from February Billing: $ 75.00 Less retainer (if applicable): $ 0.00 Payment received: 3/27/2007 $ 75.00 $ 0.00 Miscellaneous: $ 0.00 Interest $ 0.00 TOTAL AMOUNT DUE: $ 45.00 e Please remit payment by April 12, 2007. Make check or money order payable to "Stephen R Conroy, Attorney" and remit to P.O. Box 999, Monticello. MN 55362 PP=.A,SE CHARGE MY VISA OR MASTERCARD ACCOUNT ACCOUNT # EXPIRATION DATE PRINTED N.!\.ME SIGNATURE 261 East Broadway P.o. Box. 999 Monticello, MN 55362 (763) 295-6667 Telephone (763) 295-6666 Fax Email: conroylaw@tds.net HOURS 0.3 . City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 Tax ID No. 41-1225694 March 21, 2007 Throuah Februarv 28. 2007 MN190-00101 General HRA Matters MN190-00125 Economic Development TIF (Walker Design) MN190-00126 Excel Energy Tax Agreement . Total Current Billing: I declare, under penalty of law, that this account, claim or demand is just and correct and that no part of it has been pai Signature of Claimant e 39.00 2,353.50 968.55 3,361.05 . e e Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 (612) 337-9300 41-1225694 March 21, 2007 Invoice # 76186 City of Monticello Accounts Payable 505 Walnut Street, Suite 1 Monticello, MN 55362 MN190-00101 General HRA Matters Through February 28, 2007 For All Legal Services As Follows: 2/9/2007 SJB Email from/to 0 Koropchak regarding Minn Dev. Agency TIF request in Otter Park Total Services: Hours 0.20 $ Total Services and Disbursements:$ -?- \ ?, l.\ lti ?O l :~O l\{) ~ y~ ~ -01) Amount 39.00 39.00 39.00 . Page: 2 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 c:s~ \A'vJ ':}.\'Q. ~O'\ '-\-~'~ ~ \-~ \:r:~ CD~ qO ~O City of Monticeiio February 28, 2007 MN190-00125 Economic Deveiopment TIF (Walker Design) Through February 28, 2007 For Aii Legai Services As Foiiows: 2/5/2007 SJB Review Koropchak remail; phone caii with Koropchak regarding deed terms; conference with M Ingram regarding same Hours 0.70 Amount 136.50 2/6/2007 MNI Draft contract for private development, Walker Instore. 4.60 759.00 2/6/2007 MNI Phone conversation with Ollie at City to clarify terms of 0.10 16.50 contract. . 2/7/2007 SJB Conference with M Ingram regarding TIF Subsidy 0.20 39.00 procedures 2/7/2007 MNI Review schedule and resolutions; email correspondence 4.60 759.00 with Rebecca at Ehlers and S Bubul. 2/9/2007 MNI Finalize and circulate redevelopment contract. 2.10 346.50 219/2007 MNI Phone conversation with Oiiie regarding changes to 1.40 231.00 Contract; revise and resend. 2/21/2007 MNI Review new restrictive covenants for Contract from Ollie; 0.40 66.00 revise Contract. T ota I Services : $ 2,353.50 Total Services and Disbursements:$ 2,353.50 e . . . City of Monticello February 28, 2007 MN190-00126 Page: 3 Kennedy & Graven, Chartered 200 South Sixth Street Suite 470 Minneapolis, MN 55402 ~r Excel Energy Tax Agreement Through February 28, 2007 For All Legal Services As Foilows: 2/2/2007 SJB Call with J O'Neill regarding NSP agreement; email to Ruff regarding same 2/2/2007 2/6/2007 2/8/2007 2/12/2007 2/12/2007 2/12/2007 2/14/2007 Hours 0.75 MNI Conference call with Jeff O'Neill on revenue stabilization agreement; call to Red Wing city attorney regarding sale of facility. MNI Voicemail to Red Wing city attorney regarding sale 0.10 provision in revenue stabilization agreement. 1.20 MNI Phone conversation with Jeff O'Neill regarding Agreement; 0.30 voicemail to Red Wing attorney regarding sale of facility question. SJB Emailsto/fromO.Neill. Ruff regarding NSP Agreement; 0.30 conference call with M Ingram regarding council meeting MNI Email correspondence with Jeff O'Neill regarding NSP 0.30 agreement and attendance at Council meeting. MNI Travel and attendance at City Council meeting. 2.00 MNI Office conference with S Bubul regarding Council meeting 0.20 and need for follow-up on Sherburne County points. Total Services: $ For All Disbursements As Follows: 1/8/2007 2/12/2007 Martha Ingram; Mileage Expense Martha Ingram; Mileage Expense Total Disbursements: Total Services and Disbursements:$ Amount 146.25 198.00 16.50 49.50 58.50 49.50 330.00 33.00 881.25 $ 43.65 43.65 87.30 968.55 .Payable to: ITY OF MONTICELLO MONTICELLO TIMES _ox 420 E RIVER STREET T1CELLO MN 55362 (763) 295-3131 134.05 .00 .00 .00 .00 Fax(763) 295-3080 INVOICE 1 03/29/07 133 LEGAL. 133 Advertising CITY OF MONTICELLO ATTN: ACCOUNTS PAYABLE 505 WALNUT ST STE 1 MONTICELLO MN 55362 Amount Paid: Comments: Ad #: 717091 .~----------------------------------------------------------------------- Take Note: if you pay from this individual ad invoice. be careful not to double pay from the month-end statement. PHN LAND SALE OLLIE KOROPCHAK 03/29 MTI/MO 134.05 134.05 . L__~, t'., PAY? 011.<. '(?--ir\~ .L\l. S ~ ~ 3 s \. \. '" 'i' (\ 'Irlltial:ii! ~ ~-~ O. \ 2 2007 . ij J q.. \" '"? C:eL.. '\ liP ',1 , ~--'! ! n .'." ., "~~-~-'''-'''- -."" 0.00 0.00 0.00 134.05 TICELLO TIMES (763) 295-3131 307133 . UNAPPLIED AMOUNTS ARE INCLUDED IN TOTAL AMOUNT DUE . . . 12. BRA Agenda - 04/11/07 Consideration of Executive Director ReDort. A) In the amma! Business Subsidy Report to the State due April 1 2007 - Dahlheimer's reported a total of32 full time jobs at an average of$23.819 without benefits and an additional 6 PT. Their goal was 3 new jobs at an average of at least $19.90 per hour and 28 retained at an average of at least $20.21 per hour without benefits. B) Karlsburger moved into their new facility mid-March and a tour will be scheduled soon. EDA $200,000 loan closed on the 28th of February. C) I had a great vacation. I could get use to the Florida life-style very quickly. D) SCSU students toured Monticello March 30 as part of their Feasibility Study requested by the HRAlIDC Marketing Committee. The presentation ofthe study will be sometime in April. Thanks to Susie at the Chamber, Lynn Dahl-Fleming, Jeff, and Angela for helping out. E) The Monticello Chamber Golf Outing is May 17. 1