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EDA Agenda - 02/23/2022
AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, February 23rd, 2022 — 7:00 a.m. Mississippi Room, Monticello Community Center Commissioners: President Steve Johnson, Vice President Jon Morphew, Treasurer Tracy Hinz, 011ie Koropchak-White, Hali Sittig and Councilmembers Lloyd Hilgart and Jim Davidson Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Sarah Rathlisberger and Hayden Stensgard 1. Call to Order 2. Roll Call 7:00 a.m. 3. Consideration of Additional Agenda Items 4. Consent Agenda a. Consideration of Adopting 2022-2024 EDA Workplan Regular Agenda 5. Consideration of Adopting Resolution #2022-03 Authorizing Establishment of Affordable Housing Tax Increment Financing (TIF) District 1-42 to support Headwaters Development's 108 -unit Apartment proposal 6. Consideration of Adopting Resolution #2022-04 Authorizing Establishment of Affordable Housing Tax Increment Financing (TIF) District 1-43 supporting Headwaters Development's 60 -unit Twin Home proposal 7. Consideration of Adopting Resolution #2022-05 Requesting the City Council Call for a Public Hearing regarding the Establishment of a Redevelopment Tax Increment Financing (TIF) District 1-45 related to the Deephaven-Buchholz Block 52 Redevelopment Proposal 8. Consideration of Authorizing entering into a Financial Planning Agreement with Northland Securities, Inc. (NSI) related to proposed Redevelopment TIF District 1-45 in connection with Block 52 Redevelopment efforts 9. Consideration of Adopting Resolution #2022-06 Calling for a Public Hearing related to a proposed land sale of EDA owned property to Suburban Manufacturing, Inc. 10. Consideration of Amending Resolution #2022-01 Authorizing submittal of a Redevelopment Grant Application to MN -DEED in the amount of $517,500 related to Block 52 Redevelopment efforts 11. Economic Development Director's Report 12. Adjourn EDA Agenda: 02/23/22 4a. Consideration of Adopting Proposed 2022 EDA Workplan (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting the proposed 2022-2024 Workplan. Discussior and review of the 2022-2024 Workplan took place during the regular meeting on January 12, 2022, and in an EDA workshop on February 9, 2022. The EDA members stated agreement with the concept of a multi-year plan due to tendency for goals to overlap years. While many of the strategies are similar to prior workplans, there are several goals that have been revised to reflect progress or completion. The Workplan goals and objectives are based on the Economic Development implementation chart that was included in the Monticello 2040 + Comprehensive Plan. The proposed 2022- 2024 Workplan is attached to this report for final review and comment. If the EDA has additional edits, staff asks that the 2022-2024 Workplan be considered for approval contingent on staff making the final adjustments to the document as directed by the EDA. Al. Staff Impact: Preparation of the 2022-2024 EDA Workplan required a fair amount of staff time of the Community Development Director and the Economic Development Manager. The work tasks related to the Workplan update are integral to regular staff duties. A2. Budget Impact: The review and editingtasks of the annual workplans are included in the job descriptions of the EDA support staff. As such, those associated costs are part of the EDA's routine operating expenditures. ALTERNATIVE ACTIONS: 1. Motion to adopt the 2022-2024 EDA Workplan as presented. 2. Motion to adopt the 2022-2024 EDA Workplan with revisions identified by the EDA. 3. Motion to table the adoption of the 2022-2024 EDA Workplan for further research and/or discussion. B. STAFF RECOMMENDATION: If the EDA feels the 2022-2024 Workplan is complete and meets their approval, then Alternative #1 is appropriate. If the EDA feels that the 2022-2024 Workplan needs to be further revised, then Alternative #2 or #3 is appropriate. 2 C. SUPPORTING DATA: A. Proposed 2022-2024 EDA Workplan B. Marked Up 2022-2024 Workplans C. Economic Development Implementation Chart, Monticello 2040 + Comprehensive Plan, 11-23-20 Monticello MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY 2022-2024 ECONOMIC DEVELOPMENT WORK PLAN EDA Purpose: The EDA is charged with coordinating and administering the City of Monticello's economic development and redevelopment plans and programs. The EDA is also responsible for housing and housing redevelopment. EDA Work Plan Mission Statement: The EDA's work plan is adopted in support of achieving the goals of the Monticello 2040 + Comprehensive Plan. The EDA will be proactive by developing and undertaking actions for achievement of the Comprehensive Plan's Economic Development goals and will be reactive in responding to economic development opportunities as they arise in the most timely and effective manner possible. The EDA shall utilize the Economic Development Implementation Chart contained in the Comprehensive Plan as a guiding document creating its 2022-2024 Work Plan. Comprehensive Plan Goals: 1. Business Attraction and Retention 2. Tax Base Expansion 3. Downtown Vitality 4. Redevelopment and Reinvestment 5. Life Cycle Housing 6. Workforce Development 7. Promotion and Partnerships 8. Opportunity Focus Areas 11 Page GOAL #1: BUSINESS ATTRACTION AND RETENTION Policy 1.1. Business and Employment Retention Strategies: 1. Maintain a strong Business Retention and Expansion (BR&E) program to monitor opportunities for continued growth and expansion of businesses as well as the continued relationship development between the City and existing businesses. 2. Identify and support companies that are expanding and adding employees. 3. Identify and promote programs that assist existing companies in expansion and creation of new positions. 4. Assist and support companies in accessing business assistance programs including financing and educational programs. 5. Bring Businesses and Educations Organizations together to create training programs to foster new living wage opportunities. Policy 1.2: Local Business Support Strategies: I . Facilitate relationships with existing businesses on the expansion, redevelopment and improvement of their buildings and facilities. 2. Consider facade rehabilitation programs, small business loans, grants and other tools to encourage property reinvestment and support local businesses. 3. Foster partnerships and maintain networking relationships with the goal of maintaining communication in support of existing businesses. GOAL #2: TAX BASE EXPANSION Policy 2.1: Diversify economic sectors to broaden the base of available living wage employment in the community. Strategies I. Capitalize on the proximity to the I-94 regional transportation facilities, available land and educated and skilled workforce to create opportunities for job growth. 2. Inventory existing industry clusters by attracting similar and complementary businesses. 3. Work with existing business clusters to expand the attraction of supply chain companies. 4. Recognize changing land use patterns for industrial parks, and other or alternative uses such as co -working spaces. Policy 2.2: Maintain a business development and job creation toolbox to assist existing and future businesses. Strategies: Continue discussion on use of tax reimbursement/abatement, including development of criteria/application. 21 Page 2. Identify and communicate new or innovative state and federal programs or grants which could be leveraged to support business development. 3. Proactively support small business start-up efforts through programs, collaborative efforts and various tools available for small businesses. Policy 2.3. Work collaboratively with partners to foster the attraction of new businesses. Strategies: 1. Continue to support the IEDC interactions within the Wright County Workforce Pathways efforts in addressing workforce needs and training. 2. Consider IEDC recommendations and be prepared to be a partner in potential solutions based on WCWFP findings. 3. Partner with Wright County EDA on infrastructure and development project funding as warranted. GOAL #3: DOWNTOWN VITALITY Policy 3.1: Implement the recommendations of the Downtown Small Area Plan. Strategies: 1. Support and advocate for improvements to the downtown as envisioned in the Small Area Plan and Walnut Street Corridor Plan. 2. Develop and support the appropriate policies, programs, and incentives that enable the type of development described in the Plan. 3. Continue to build a funding base for use in property acquisition and redevelopment efforts in targeted areas. 4. Implement a facade improvement program for desired revitalization areas. 5. Continue to meet with downtown property owners with the goal of relationship building in informal group settings (Downtown Rounds) or individually and to understand their concerns with traffic, parking, land use and possible reinvestment in their property as well as willingness to sell, partner, desired price, etc. 6. Encourage continued incorporation of arts as an economic development tool for Downtown Monticello and the community at -large. 7. Support opportunities for park and pathway development as consistent with the Downtown Small Area Plan. 8. Encourage the redesign of the pathway connection under the MN-TH #25 bridge to incorporate safety elements and improved lighting. 9. Ensure that greenway and pedestrian/cycle connections are considered within the downtown and from the downtown to other areas within the community. 10. Support park improvements in the downtown area. 31 Page GOAL #4: REDEVELOPMENT & REINVESTMENT Policy 4.1: Redevelopment: Continue to support redevelopment efforts for publicly owned properties in Block 52, Block 34 and other EDA owned sites. Strategies: 1. Work collaboratively with the selected developer to implement an agreed upon Block 52 redevelopment proposal utilizing Small Area Plan vision and principals. 2. Advocate for adequate City Council support for related Block 52 infrastructure components that are impacted by redevelopment proposals. 3. Advocate for the best designs and efficient traffic circulation related to the Walnut Street - River Street connection in support of Block 52 redevelopment. 4. Remain open to and analyze strategic opportunities for redevelopment throughout the community. 5. Proactively market Block 34, the Cedar/Broadway site, 4th Street site, West River Street parcel and the West 7th Street land tract to the commercial and residential development community. GOAL #5: LIFE -CYCLE HOUSING Policy 5.1: Actively promote and seek opportunities for the development of a wide variety of housing types, styles and price points as a mechanism to support and attract employment. Strategies: 1. Develop revised policy statements for housing which address the identified 2020 Housing Study needs. 2. Continue to market workforce housing development on EDA owned land along East 4th Street and Outlot A, Country Club Manor, or at other suitable sites in the City, including the Downtown. 3. Support efforts by private and non-profit entities to develop affordable housing projects utilizing state and federal programs. 4. Examine the use and application of available housing TIF dollars per the 2016 TIF Management Plan and the adopted Policy Statements for Available TIF Funds. 5. Continue to periodically examine housing stock for aging or blighted properties and research development of programs for redevelopment and/or revitalization of existing housing. 6. Market the availability of incentives/subsidies available for development of housing. GOAL #6: WORKFORCE DEVELOPMENT Policy 6.1. Diversified and Skilled Workforce Strategies: 1. Support interactions with local organizations to address workforce needs and training. 41 Page 2. Partner with Wright County Workforce Pathways (WCWFP) on solutions for workforce needs and training. 3. Promote Central Minnesota Jobs and Training Services as an option to Community College or university for students seeking alternative careers in the trades, manufacturing, and similar sectors. 4. Support the development of a plan to market living wage employment opportunities. GOAL #7: PROMOTION & PARTNERSHIPS Policy 7.1: Create and maintain a comprehensive Marketing & Communication Strategy for priority sectors and locations. Strategies: 1. Identify community partners that can be regularly engaged and advised on economic development activities and events. 2. Engage with partners in the development of strategic marketing plan, including creation of an overall economic development brand, for various focus audiences and sectors of development; residential, commercial and industrial and redevelopment. 3. Incorporate the marketing of EDA incentive programs in a more proactive manner, both within the community and beyond, a. Present existing and new incentive programs to smaller community groups, local banks, realtors, and local businesses either in an informal group session or a formal roundtable format. b. Develop and communicate a "complete" development package program which provides support and assistance to prospects and developers from inquiry to construction. 4. Market industrial development at the Monticello Business Center (Otter Creek Business Park) to a broad variety of prospects as guided by the Comprehensive Plan. a. Focus on prospects which serve or rely on the St. Cloud and Twin Cities markets. b. Focus on supply chain prospects. 5. In collaboration with the IEDC, communicate with current business and industry in support of Business Retention & Expansion. a. Engage in informal business and industry small group meetings and explore potential format of helpful formal round tables meetings. b. Work with the Monticello Times to do a business spotlight or profile article two times per year. c. Leverage the networks of existing commercial and industrial entities currently doing business in and around Monticello. Policy 7.2: Engage as a partner in local and regional planning and development opportunities. Strategies: 1. Monitor the regional planning efforts of the Central Mississippi River Regional Planning Partnership (CMRRPP) and engage with feedback as requested. 51 Page 2. Consider funding and/or completing studies that provide policy and strategy framework for desired land uses/or projects in the downtown and for other programs. 3. Monitor commuter rail development in and around the Twin Cities metro region for potential benefits and opportunities to serve Monticello. GOAL #8. OPPORTUNITY FOCUS AREAS Policy 8.1: Opportunity Focus Areas 1. Maintain open lines of communication with property and business owners to understand their long-term development objectives. 2. Consider strategies, loans, grants and other financing methods to boost reinvestment and improvements. 3. Encourage public infrastructure investment in these areas in an effort to support private investment. Policy 8.2: Support community quality -of -life initiatives which act as economic development tools. Strategies: 1. Encourage and support coordinated planning and development of parks, trails in or near business districts. 2. Increase the visibility of the intersection of all amenities including parks and trails with the economic hubs of the city. 3. Support the development of Bertram Chain of Lakes Regional Park, including community Connections. Appendix: Monticello 2040 Vision + Plan, Economic Development and Implementation 61 Page Vk ciTr of 1i Monti cello MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY 2021 ANNUAL ECONOMIC DEVELOPMENT WORK PLAN EDA Purpose: The EDA is charged with coordinating and administering the City of Monticello's economic development and redevelopment plans and programs. The EDA is also responsible for housing and housing redevelopment. EDA Work Plan Mission Statement: The EDA's work plan is adopted in support of achieving the goals of the Monticello 2040 + Comprehensive Plan. The EDA will be proactive by developing and undertaking actions for achievement of the Comprehensive Plan's Economic Development goals and will be reactive in responding to economic development opportunities as they arise in the most timely and effective manner possible. The EDA shall utilize the Economic Development Implementation Chart as a guiding document creating its 2021 Work Plan. Comprehensive Plan Goals: 1. Business Attraction and Retention 2. Tax Base Expansion 3. Downtown Vitality 4. Redevelopment and Reinvestment 5. Life Cycle Housing 6. Workforce Development 7. Promotion and Partnerships 8. Opportunity Focus Areas 1IPage GOAL #1: BUSINESS ATTRACTION AND RETENTION Policy 1.1. Business and Employment Retention Strategies: 1. Maintain a strong Business Retention and Expansion (BR&E) program to monitor opportunities for continued growth and expansion of businesses as well as the continued relationship development between the City and existing businesses. Ongoing 2. Identify and support companies that are expanding and adding employees. Ongoing 3. Identify and promote programs that assist existing companies in expansion and creation of new positions. Ongoing 4. Assist and support companies in accessing business assistance programs including financing and educational programs. Ongoing 5. Bring Businesses and Educations Organizations together to create training programs to foster new living wage opportunities. Ongoing Policy 1.2: Local Business Support Strategies: 1. Facilitate relationships with existing businesses on the expansion, redevelopment and improvement of their buildings and facilities. Ongoing (WashburnPOS example) 2. Consider fagade rehabilitation programs, small business loans, grants and other tools to encourage property reinvestment and support local businesses. Ongoing 3. Foster partnerships and maintain networking relationships with the goal of maintaining communication in support of existing businesses. Ongoing GOAL #2: TAX BASE EXPANSION Policy 2.1: Diversify economic sectors to broaden the base of available living wage employment in the community. Strategies 1. Capitalize on the proximity to the I-94 regional transportation facilities, available land and educated and skilled workforce to create opportunities for job growth. Ongoing 2. Inventory existing industry clusters by attracting similar and complementary businesses. Ongoing 3. Work with existing business clusters to expand the attraction of supply chain companies. Ongoing 4. Recognize changing land use patterns for industrial parks, and other or alternative uses such as co -working spaces. Ongoing 2 1 P a g e Policy 2.2: Maintain a business development and job creation toolbox to assist existing and future businesses. Strategies: I . Continue discussion on use of tax reimbursement/abatement, including development of criteria/application. Ongoing 2. Identify and communicate new or innovative state and federal programs or grants which could be leveraged to support business development. Ongoing 3, Proactively support small business start-up efforts through programs, collaborative efforts and various tools available for small businesses. Ongoing Policy 2.3. Work collaboratively with partners to foster the attraction of new businesses. Strategies: 1. Continue to support the IEDC interactions within the Wright County Workforce Pathways efforts in addressing workforce needs and training. Ongoing 2. Consider IEDC recommendations and be prepared to be a partner in potential solutions based on WCWFP findings. Ongoing GOAL #3: DOWNTOWN VITALITY Policy 3.1: Implement the recommendations of the Downtown Small Area Plan. Strategies: 1. Support and advocate for improvements to the downtown as envisioned in the Small Area Plan and Walnut Street Corridor Plan. Ongoing 2_ Develop and support the appropriate policies, programs, and incentives that enable the type of development described in the Plan. Ongoing 3. Continue to build a funding base for use in property acquisition and redevelopment efforts in targeted areas. Ongoing 4. Implement a fagade improvement program for desired revitalization areas. Ongoing 5 Continue to meet with downtown property owners either in an informal group setting (Downtown Rounds) or individually to understand their concerns with traffic, parking, land use and possible reinvestment in their property as well awillingness to self, partner, des red'� price, etc. Ongoing��� rG 2 ods s 6. Encourage continued incorporation of arts as an economic development tool for Downtown Monticello and the community at -large. Ongoing T Support opportunities for park and pathway development as consistent with the Downtown Small Area Plan. Ongoing 8. Encourage the redesign of the pathway connection under the MN-TH #25 bridge to incorporate safety elements and improved lighting. Ongoing - Tied to CIP 9. Ensure that greenway and pedestrian/cycle connections are considered within the downtown and from the downtown to other areas within the community. Ongoing 10. Support park improvements in the downtown area. Ongoing 3 1 P a g e GOAL #4: REDEVELOPMENT & REINVESTMENT Policy 4.1: Redevelopment: Continue to support redevelopment efforts for publicly owned properties in Block 52, Block 34 and other EDA owned sites. Strategies: 1. Continue to focus on site control for a potential future targeted redevelopment in Block 52 as envisioned in the Downtown Small Area Study Plan. Change this to Work Collaboratively with the Selected Developer to implement an agreed upon redevelopment project 2. Proactively market Block 52 as a unique regional site and development opportunity; reach out to developers to gauge interest, potential suitability and capacity to collaborate on a Z> redevelopment plan. Ongoing and close to being Done 1 1'.)31 Advocate for reconnecting Walnut Street to River Street in support of redevelopment. oo" t,4 f� 4. Remain open to and analyze strategic opportunities for redevelopment throughout the 4-P Get /A pommunity. Ongoing tied to CIP Aroactively market Block 34, the Cedar/Broadway site, 4th Street site, West River Street parcel and the West 7th Street land tract to the commercial and residential development community. Ongoing Cs GOAL #5: LIFE -CYCLE HOUSING G jN5 Policy 5.1: Actively promote and seek opportunities for the development of a wide variety of housing types, styles and price points as a mechanism to support and attract employment. Strategies: 1. Develop revised policy statements for housing which address the identified 2020 Housing Study needs. Not accomplished yet. Time constraints 2. Continue to market workforce housing development on EDA owned land along East 4' Street and Outlot A of Country Club Manor, or at other suitable sites in the City, including the Downtown. Ongoing and close to being done for 7' Street West site 3 � Support efforts by private and non-profit entities to develop affordable housing projects utilizing state and federal programs. Ongoing 4, Examine the use and application of available housing TIF dollars per the 2016 TIF Management Plan and the adopted Policy Statements for Available TIF Funds. Ongoing 5. Continue to periodically examine housing stock for aging or blighted properties and research development of programs for redevelopment and/or revitalization of existing housing. Ongoing 6. Market the availability of incentives/subsidies available for development of housing. Ongoing GOAL #6: WORKFORCE DEVELOPMENT 41 Page Policy 6.1. Diversified and Skilled Workforce Strategies: 1. Continue to support interactions with local organizations to address workforce needs and training. Ongoing — involved with the School District on Student work experience internships 2. Partner with Wright County Workforce Pathways (WCWFP) on solutions for workforce eeds and training. Ongoing 3. romote Central Minnesota Jobs and Training Services as an option to Community College or university for students seeking alternative careers in the trades, manufacturing, and similar sectors and create a plan to market financial tools which support living wage Jemployment as a primary focus. Ongoing GOAL #7: PROMOTION & PARTNERSHIPS Policy 7.1: Create and maintain a comprehensive Marketing & Communication Strategy for priority sectors and locations. Strategies: 1. Identify community partners that can be regularly engaged and advised on economic development activities and events. Ongoing 2. Support the development of strategic marketing plan, including creation of an overall economic development brand, for various focus audiences and sectors of development; residential, commercial and industrial and redevelopment. In process (AE2S) 3. Incorporate the marketing of EDA incentive programs in a more proactive manner, both within the community and beyond, a. Present existing and new incentive programs to smaller community groups, local banks, realtors, and local businesses either in an informal group session or a formal roundtable format. b. Develop and communicate a "complete" development package program which provides support and assistance to prospects and developers from inquiry to construction. 4. Market industrial development at the Monticello Business Center (Otter Creek Business Park) to a broad variety of prospects as guided by the Comprehensive Plan. Ongoing; no trade shows a. Focus on prospects which serve or rely on the St. Cloud and Twin Cities markets. b. Focus on supply chain prospects. 5. In collaboration with the IEDC, communicate with current business and industry in support of Business Retention & Expansion. Ongoing - BRE visits = success a. Engage in informal business and industry small group meetings and explore potential format of helpful formal round tables meetings. Not done due to Pandemic and time constraints b. Work with the Monticello Times to do a business spotlight or profile article two times per year. Not done; revisit with Monticello Times 5 1 P a g e c. Leverage the networks of existing commercial and industrial entities currently doing business in and around Monticello. Ongoing through various channels Policy 7.2: Engage as a partner in local and regional planning and development opportunities. Strategies: 1. Monitor the regional planning efforts of the Central Mississippi River Regional Planning Partnership (CMRRPP) and engage with feedback as requested. Ongoing 2. Consider funding and/or completing studies that provide policy and strategy framework for desired land uses/or projects in the downtown and for other programs. Ongoing 3. Monitor commuter rail development in and around the Twin Cities metro region for potential benefits and opportunities to serve Monticello. Ongoing GOAL #8. OPPORTUNITY FOCUS AREAS Policy 8.1: Opportunity Focus Areas 1. Maintain open lines of communication with property and business owners to understand their long-term development objectives. 2. Consider strategies, loans, grants and other financing methods to boost reinvestment and improvements. Ongoing (came from the Comp Plan Update language) 3. Encourage public infrastructure investment in these areas in an effort to support private investment. Ongoing; Tied to CIP Policy 8.2: Support community quality -of -life initiatives which act as economic development tools. Strategies: 1. Encourage and support coordinated planning and development of parks, trails in or near business districts. Ongoing; tied to Park Planning and CIP 2. Support the development of Bertram Chain of Lakes Regional Park, including community Connections. Ongoing 3. Increase the visibility of the interconnection of all amenities including parks and trails with economic hubs of the City. Ongoing Appendix: Monticello 2040 Vision + Plan, Economic Development and Implementation 6 1 P a g e � ciry of � Monticello MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY 2021 ANNUAL ECONOMIC DEVELOPMENT WORK PLAN EDA Purpose: The EDA is charged with coordinating and administering the City of Monticello's economic development and redevelopment plans and programs. The EDA is also responsible for housing and housing redevelopment. EDA Work Plan Mission Statement: The EDA's work plan is adopted in support of achieving the goals of the Monticello 2040 + Comprehensive Plan. The EDA will be proactive by developing and undertaking actions for achievement of the Comprehensive Plan's Economic Development goals and will be reactive in responding to economic development opportunities as they arise in the most timely and effective manner possible. The EDA shall utilize the Economic Development Implementation Chart as a guiding document creating its 2021 Work Plan. Comprehensive Plan Goals: 1. Business Attraction and Retention 2. Tax Base Expansion 3. Downtown Vitality 4. Redevelopment and Reinvestment 5. Life Cycle Housing 6. Workforce Development 7. Promotion and Partnerships 8. Opportunity Focus Areas 1IPage GOAL #1: BUSINESS ATTRACTION AND RETENTION Policy 1.1. Business and Employment Retention Strategies: 1. Maintain a strong Business Retention and Expansion (BR&E) program to monitor opportunities for continued growth and expansion of businesses as well as the continued relationship development between the City and existing businesses. 2. Identify and support companies that are expanding and adding employees. 3. Identify and promote programs that assist existing companies in expansion and creation of new positions. 4. Assist and support companies in accessing business assistance programs including financing and educational programs. 5. Bring Businesses and Educations Organizations together to create training programs to foster new living wage opportunities. Policy 1.2: Local Business Support Strategies: 1. Facilitate relationships with existing businesses on the expansion, redevelopment and improvement of their buildings and facilities. 2. Consider fagade rehabilitation programs, small business loans, grants and other tools to encourage property reinvestment and support local businesses. 3. Foster partnerships and maintain networking relationships with the goal of maintaining communication in support of existing businesses. GOAL #2: TAX BASE EXPANSION Policy 2.1: Diversify economic sectors to broaden the base of available living wage employment in the community. Strategies 1. Capitalize on the proximity to the I-94 regional transportation facilities, available land and educated and skilled workforce to create opportunities for job growth. 2. Inventory existing industry clusters by attracting similar and complementary businesses. 3. Work with existing business clusters to expand the attraction of supply chain companies. 4. Recognize changing land use patterns for industrial parks, and other or alternative uses such as co -working spaces. Policy 2.2: Maintain a business development and job creation toolbox to assist existing and future businesses. Strategies: 1. Continue discussion on use of tax reimbursement/abatement, including development of criteria/application. 2 1 P a g e 2. Identify and communicate new or innovative state and federal programs or grants which could be leveraged to support business development. 3. Proactively support small business start-up efforts through programs, collaborative efforts and various tools available for small businesses. Policy 2.3. Work collaboratively with partners to foster the attraction of new businesses. Strategies.- 1. trategies: 1. Continue to support the IEDC interactions within the Wright County Workforce Pathways efforts in addressing workforce needs and training. 2. Consider IEDC recommendations and be prepared to be a partner in potential solutions based on WCWFP findings. 3. Identify how the Monticello EDA can coordinate with the Wright County EDA GOAL #3: DOWNTOWN VITALITY Policy 3.1: Implement the recommendations of the Downtown Small Area Plan. Strategies: 1. Support and advocate for improvements to the downtown as envisioned in the Small Area Plan and Walnut Street Corridor Plan. 2. Develop and support the appropriate policies, programs, and incentives that enable the type of development described in the Plan. 3. Continue to build a funding base for use in property acquisition and redevelopment efforts in targeted areas. 4. Implement a fagade improvement program for desired revitalization areas. 5. Continue to meet with downtown property owners either in an informal group setting (Downtown Rounds) or individually to understand their concerns with traffic, parking, land use and possible reinvestment in their property as well as willingness to sell, partner, desired price, etc. Should this activity by restarted regarding Block 52? 6. Encourage continued incorporation of arts as an economic development tool for Downtown Monticello and the community at -large. 7 Support opportunities for park and pathway development as consistent with the Downtown Small Area Plan. Should this be coordinated with Block 52 development planning? (,, 8. Encourage the redesign of the pathway connection under the MN-TH #25 bridge to W 03"Opp' incorporate safety elements and improved lighting. 9. Ensure that greenway and pedestrian/cycle connections are considered within the downtown and from the downtown to other areas within the community. 10. Support park improvements in the downtown area. 3 1 P a g e GOAL #4: REDEVELOPMENT & REINVESTMENT Policy 4.1: Redevelopment: Continue to support redevelopment efforts for publicly owned properties in Block 52, Block 34 and other EDA owned sites. Strategies: 1. Continue to focus on site control for a potential future targeted redevelopment in Block 52 as envisioned in the Downtown Small Area Study Plan. 2. Proactively market Block 52 as a unique regional site and development opportunity; reach out to developers to gauge interest, potential suitability and capacity to collaborate on a redevelopment plan. Has this been accomplished? 3. Advocate for reconnecting Walnut Street to River Street in support of redevelopment. Does this fit with current development plans? 4. Remain open to and analyze strategic opportunities for redevelopment throughout the community. 5. Proactively market Block 34, the Cedar/Broadway site, 4t' Street site, West River Street parcel and the West 7t' Street land tract to the commercial and residential development community. GOAL #5: LIFE -CYCLE HOUSING Policy 5.1: Actively promote and seek opportunities for the development of a wide variety of housing types, styles and price points as a mechanism to support and attract employment. Strategies: 1. Develop revised policy statements for housing which address the identified 2020 Housing Study needs. 2, Continue to market workforce housing development on EDA owned land along East 41 Street and Outlot A of Country Club Manor, or at other suitable sites in the City, including the Downtown. Should this be restated in light of current status of active proposals? 3. Support efforts by private and non-profit entities to develop affordable housing projects utilizing state and federal programs. 4. Examine the use and application of available housing TIF dollars per the 2016 TIF Management Plan and the adopted Policy Statements for Available TIF Funds. 5. Continue to periodically examine housing stock for aging or blighted properties and research development of programs for redevelopment and/or revitalization of existing housing. 6. Market the availability of incentives/subsidies available for development of housing. GOAL #6: WORKFORCE DEVELOPMENT Policy 6.1. Diversified and Skilled Workforce Strategies: 41 Page I . Continue to support interactions with local organizations to address workforce needs and training. 2. Partner with Wright County Workforce Pathways (WCWFP) on solutions for workforce needs and training. 3. Promote Central Minnesota Jobs and Training Services as an option to Community College or university for students seeking alternative careers in the trades, manufacturing, and similar sectors and create a plan to market financial tools which support living wage employment as a primary focus. GOAL #7: PROMOTION & PARTNERSHIPS Policy 7.1: Create and maintain a comprehensive Marketing & Communication Strategy for priority sectors and locations. Strategies: 1. Identify community partners that can be regularly engaged and advised on economic development activities and events. 2, Support the development of strategic marketing plan, including creation of an overall economic development brand, for various focus audiences and sectors of development; residential, commercial and industrial and redevelopment. Does the CET funding now engaged satisfy this goal? 3. Incorporate the marketing of EDA incentive programs in a more proactive manner, both within the community and beyond, a. Present existing and new incentive programs to smaller community groups, local banks, realtors, and local businesses either in an informal group session or a formal roundtable format. b. Develop and communicate a "complete" development package program which provides support and assistance to prospects and developers from inquiry to construction. 4. Market industrial development at the Monticello Business Center (Otter Creek Business Park) to a broad variety of prospects as guided by the Comprehensive Plan. a. Focus on prospects which serve or rely on the St. Cloud and Twin Cities markets. b. Focus on supply chain prospects. 5. In collaboration with the IEDC, communicate with current business and industry in support of Business Retention & Expansion. a. Engage in informal business and industry small group meetings and explore potential format of helpful formal round tables meetings. b. Work with the Monticello Times to do a business spotlight or profile article two times per year. c. Leverage the networks of existing commercial and industrial entities currently doing business in and around Monticello. 5 1 P a g e Policy 7.2: Engage as a partner in local and regional planning and development opportunities. Strategies: 1. Monitor the regional planning efforts of the Central Mississippi River Regional Planning Partnership (CMRRPP) and engage with feedback as requested. 2. Consider funding and/or completing studies that provide policy and strategy framework for desired land uses/or projects in the downtown and for other programs. 3. Monitor commuter rail development in and around the Twin Cities metro region for potential benefits and opportunities to serve Monticello. GOAL #8. OPPORTUNITY FOCUS AREAS Policy 8.1: Opportunity Focus Areas 1. Maintain open lines of communication with property and business owners to understand their long-term development objectives. 2. Consider strategies, loans, grants and other financing methods to boost reinvestment and improvements. 3. Encourage public infrastructure investment in these areas in an effort to support private investment. Policy 8.2: Support community quality -of -life initiatives which act as economic development tools. Strategies: 1. Encourage and support coordinated planning and development of parks, trails in or near business districts. 2. Support the development of Bertram Chain of Lakes Regional Park, including community Connections. 3. Increase the visibility of the interconnection of all amenities including parks and trails with economic hubs of the City. Appendix: Monticello 2040 Vision + Plan, Economic Development and Implementation 6 1 P a g e CHAPTER 5: ECONOMIC DEVELOPMENT 115 INTRODUCTION The Economic Development Chapter outlines the goal and policies of Monticello to achieve its long term economic development objectives. One of the top priorities is to allow for expansion and diversification of the community's employment and tax base. Over time, Monticello will need to increase tax revenue due to the planned future closure of Xcel MNGP. In addition to objectives related to expanding employment opportunities and tax base growth, the economic development chapter also provides direction for business growth to meet the needs of commerce, industry and the residents well into the future. Strategies include providing a range of "lifecycle" housing options, transportation improvements, and development of a skilled, regional workforce to keep employment strong. The Economic Development chapter is organized into the following sections: Market Overview Economic Snapshot Workforce Development Workforce Housing Economic Development Issues and Opportunities Goals, Policies, and Strategies The City takes a proactive role in economic development efforts related to business assistance, retention and attraction. The City's economic development toolbox includes the following: • Land acquisition and assembly assistance Site readiness assistance • Construction ofpublic improvements • Brownfield remediation • Financial subsidies including tax increment financing, tax abatement, and a revolving loan program. The level of assistance offered is based on how the project meets the City of Monticello's goals for continued economic development and diversification. These goals are geared toward providing for the replacement of the tax base and employment opportunities as a result of the pending closure of the Xcel Nuclear Generating Plant (Xcel MNGP) but also for the continued creation of a diverse economy for the community and region. MARKET OVERVIEW Located in the northeast section of Wright County, Minnesota, the City of Monticello is located 50 minutes from Minneapolis and 30 minutes from St. Cloud. This regional positioning allows it to draw from the benefits of both areas. The City of Monticello is served by Interstate 94(1-94) from the east and west, and State Highway 25 from the north and south. This location allows companies currently located in the community easy access to markets across the state and country. Both roadways are rated as ten -ton roads allowing for use as commercial transportation corridors. A second full access interchange with 1-94 was constructed on the east side of the City of Monticello in 2006. Since that time the City has seen an increase in commercial construction including Mills Fleet Farm, Home Depot, Runnings (formerly K -Mart), SuperTarget, and an Aldi to name a few. The City of Monticello also has access to the Northstar Commuter Rail located 4 miles away at the Big Lake Train Station. The City is also advocating for a future additional interchange with 1-94 to be located in the northwest region of the community. Monticello is also involved with ongoing discussion for a new bridge across the Mississippi River to allow for greater access to the Highway 10 corridor. Monticello is served by two airports. The Minneapolis/St. Paul International Airport is located 47 miles away and boasts a runway length of 10,000 feet. That airport provides service to major airlines including American, United, and Delta and provides charter, commercial, freight, and jet services. The St. Cloud Regional Airport is located 23 miles away and provides a runway length of 7,000 feet. The airport provides charter, jet, and general aviation services and provides service to Allegiant and Sun Country Airlines. 116 ((S((�([ECONOMIC DEVELOPMENT I Todd Morrison _ / t Mille Lacs .A I t Stearns l d Y all 'tKendfyohi � Wright .I i 'Renville 'h Me'ead i - �.-Sibley • Nil l {r• MONTICELLO 2040 VISION +PLAN m Sherburne Isanti �� Chisago eaai�9 - Le Sueur a + Rice 1. r EXHIBIT 5.1 = cry of coal[ NE Maroeap0usrst Paul Meter,dnanarea Sr Coal Metralollten Area l� Minaret, Cortes ME 9oadWaya Water momee Pafmallar. n DMa Gty of Monticello . 13.39 Mmneapolrs6t Paul MetreO011tun Arca-3.639,190' St Card Metropolitan Area -199.901 'Woodes Monlrce o ✓- ^ Msconsn Goodhue Wabasha O 117 Growing Population As of the 2010 Census, the City of Monticello's population was 12,759. The 2017 population total was 13,747 which represents a 7.7% population increase from 2010 — 2017. The 2025 population estimate is 14,875 showing growth at a slightly higher pace than the growth experienced during 2010-2017. While this projection is a positive outlook for Monticello, it is difficult to understand what the long term effects will be following the 2020 Covid-19 Pandemic and if the economy will be slow to recover and result in slower growth than what is currently projected for 2025. TABLES.7: COMMUNITY POPULATION COMPARISON Community Monticello 2010 12,759 2017 13.747 Percent Growth (2010 - 201� 77% 2025' 14,875 Projected Percent GmwV1 (2017 - 2025) 8.2% Big Lake 10,060 10.931 8.7% 11,980 9.6% Becker 4.538 4,838 66% 5,180 71% Albertsville 7,048 7,415 5.2% 7,834 5.7% Otsego 13.571 16,746 23.4% 20,374 217% Buffalo 15,471 16,186 4.6% 17,002 5.0% -n,erernees molded bated nn m,=cssnng otAn,encn, Cemm,mnv Snw,ng A(S1 d!n aertmm Cham of lakes Regional Pam Economic Development Factors In terms of factors influencing growth and development in 2020, the commitment to the tenets of environmental, social, and governance (ESG) principles are seen as a growing trend nationally. According to a 2020 Urban Land Institute (ULI) study, the level of awareness of ESG is skewed generationally. Millennials drive ESG with 55 percent indicating that they factor ESG policies and performance into their investment decisions — a far greater percentage than for Generation X (25 percent) and Baby Boomers (11 percent). This suggests that the power of ESG to influence capital deployment will be rising overtime, qualifying it as an emerging trend. In the same ULI study, a large industrial real estate investment trust indicated that they too have seen that ESG has attracted a more diverse set of investors, that ESG aids in overall recruiting talent, and helps generate community support for proposed industrial projects. Along with a heightened focus on ESG, adoption and utilization of wireless technology will drive commercial and industrial growth as the technology is utilized in factory automation, remote supervision and control of machines and manufacturing process automation. The City of Monticello has made strategic investments in fiber optic service offerings for the business community with the development of the FiberNet system. This fiber network was developed by the City to allow for the provision of high-speed broadband access for businesses. The system is operated by Arvig Communications. TDS Telecom and Charter Communications provide similar broadband service within the community. FiberNet Monticello is an all fiber optic delivery system providing service up to one Gigabit of synchronous dedicated access. Additionally. Special Service Level Agreements (SLA) packages can be arranged for businesses ensuring continuous ultra -high-speed service. Fulfilling the City of Monticello's economic development objectives will require a large land supply dedicated to industrial and employment generating uses. The City has designated approximately 1,800 acres of land for these uses as part of the land use plan contained within this Plan. arr o, Yislon: To be a provider of quality, f7 MontweIlo innovative communication services .- _, „ e, . , with integrity and accountability. FIBERNET MONTICELLO FbeMet Monticello. Wmce o—foemetmonn[ello.eeMabouVNSlartmuAomvMue9 11118 «((� ECONOMIC DEVELOPMENT FUTURE LAND USE MAP - INDUSTRIAL DESIGNATIONS Ir" Diversifying Local Economy Prior to 2020, the City has completed a number of economic development projects including the Dalheimer Beverage and Boni Corporation expansions, and the Monticello RV Center. Together those projects have provided additional jobs and tax base for Monticello. A major Issue facing the community on the diversification of the local tax base is the suitability of land for future development. The City of Monticello completed an industrial park land absorption study in 2019 that indicated that the community did have a limited supply of industrial property available for development. The City of Monticello has a very diverse employment base even when the nuclear generating station is included in the overall employment numbers. This diversity will help the community as it works to replace the positions lost with the decommissioning of the Xcel MNGP. Monticello's top industries by North American Industry Classification System (NAICS) codes includes Retail Trade, Health Care & Social Assistance, Professional, Scientific. & Tech Services, Real Estate Rental & Leasing, Construction, and Manufacturing. Together those industries account for over 50% of the Citys employment base. Crariak P-Mmluella. somce clh, a Monlltello TABLE 52TOP MONTICELLO EMPLOYERS Xcel Energy Nuclear Power(Xcel MNGP) 221113 Electric Power Generation 700 Monticello ISD X888 611110 Public School System 576 CentraCare Health 62210 General Medical -Surgical System Hospital 500 Cargill Kitchen Solutions 42440 Egg based food products 433 Walmart Store 452311 Supercenter Discount Retail 325 Store Ultra Machine Corporation 339112 Precision Manufacturing 9 200 Home Depot 452311 Supercenter/Discount Retail 160 Store Target Store 452311 Supercenter/Discount Home 150 Store WSUPalaris 336310 Precision Machining, Engine 130 Parts Cub Foods Grocery 445110 Supermarket Grocery Store 100 Bondhus 332216 Tools/Wrenches/Screwdrivers 103 Dahlheimer Beverage 424810 Beer Distributor 96 Genereux-Westland 337212 Cabinets/Cabinet Parts 67 Distribution Suburban 333914 EubricabonlFilter System 65 Manufacturing Components Production Stamping 336370 Metal Stamping Fittings/ 62 Gaskets/Parts Twin Cities Die Cast 331523 Aluminum/Magnesium Die 62 Casting Camping World 441210 Camping Vehicle Sales 55 Aroplax Plastic Injection Molded Parts 52 Karlsburger Foods 311421 1 Soup. Sauce and Base Foods 49 120 («t(S(«t(�(« ECONOMIC DEVELOPMENT C] LARGEST EMPLOYERS LOCATION MAP ©© L� fH off` 0 MONTICELLO 2040 VISION + PLAN 121 W20 Mm0calb by Emphorm lbsfetlAlgwhn<pUyJ 11. NaMBtri Foods 01. Real Estate Holdings LLQ 1. Cuda Foods gi PropMles Incl V. Camping World SpiNt Realty LF) © 2. DahlBeimer Boons eInc 13. Cargill Inc. 3 Home Depot 14. Genereoa Fine Wood Pmal(merger s Forcing, LIC) 4 Monti,ae Independent SMom Dai 882 15. Target Cmmranonl 5. SupuNan ManWatlunng MS B of Mpnal LLQ 16. Twin Gry Die Casings Company 6 Bondbus Commoner V Wim Machining Compaq (UK Real Form LLCI -- ). Col Care Morr ig Lake Cpmm Ha ll 18. WalMerl Real Es' Illegal Tm9 piralmorl) F� 8. %cel Energy-Norhom States Power Compaq 19 Cargill Inc. 9. DOMhelmer Beversge Expenses 20. WStPolanslnq j I 10 NOPIav Rchoen PmPen es LN 21. production Stamping Pre. Al.saisho LLC) T4in _ 22. MATS Firms Farm \�FClio, of Morcel to Mool moral Bounday O Parcels SVeets �D�ggg., r ^' Ra 'ter � Water Bodies 11 eons xm �_ ma 9s sig � MondcNio ipp Employers ©© L� fH off` 0 MONTICELLO 2040 VISION + PLAN 121 Provided in Table 6.3 below are the top 15 taxpayers within the City of Monticello from 2016 to 2018 as well as their tax capacity impact on the City. The tax capacity shown is based on its taxable market value multiplied by its class rate. 1ABI E 53 2016 - 2019 TOP MONTICEi10 TAX P4YFRS Business Name Total Tax Capacity Business Name Total Tax Capacity Business Name Total Tax Capacity 2018 2017 2016 Northern States Power Co. $16294278 Northern States Power Co. $76.970,092 Northern States Power Co. (Xcel Energy) (Xcel Energy) (Xcel Energy) $15,913,229 kat Properties $295,132 Iret Properties $295.132 Wal-Mart $206,950 Mills Fleet Farm $251,524 Wal-Mart $202,950 Target Corporation $200,250 Wal-Mart $196.510 Target Corporation $199,250 Monti -Big Lake $146,880 Community Hospital Target Corporation $195,510 Monti -Big Lake $145,440 Home Depot $131,450 Community Hospital Monti -Big Lake Community Hospital $145,440 Home Depot $129,280 Spirit Master Funding $102,521 Home Depot $127,190 Mills Fleet Farm $128,368 AX TC Retail $101,626 Clear Creek Land Company $119,976 Monegascolnc $102,521 Minnegasco Inc. $78,294 Monti -Big Lake Community Hospital $109,980 Spirit Master Funding P 9 $101,626 upper's Holdings LLC $77,636 Spirit Master Funding $102,515 AX TC Retail $81,858 WSI Industries $77.252 AX TC Retail $101,634 Centerpoint Energy $A.252 licit Properties $75,782 Centerpoint Energy $95.184 Tapper's Holdings LLC. $77.636 RCE Property LLC $73,250 Tapper's Holdings I.I.C. $77,638 Anderson Companies I.I.C. $73;250 BBF Properties $71,558 WSI Industries $77,252 BBF Properties $70,318 UMC Real Estate $66,250 SCF RC Funding IV I.I.C. $73,250 Bluffs in Monticello LLC. $69,224 BNSF Railway Company $63,676 Monticello's Total Tax Capacity $29,528,145 Monticello's Total Tax Capacity $27,583,160 Monticello's Total Tax Capacity $25,891,898 Northern States Power 55.18% Northern States Power Co. 61.52% Northern States Power Co. Percentage of Tax Capacity cit Percents eof Tax Ca aci 9 P N Percentage of Tax Capacity 61.46% 122 ((�(«(«(«(« ECONOMIC DEVELOPMENT Pending Closure ofXcef Nuclear Generating Plant 1Xcel MNGP) Monticello has taken a proactive approach to assessing and diversifying its tax base. Monticello's largest taxpayer, Xcel Energy, had previously planned for its nuclear power generation plant in Monticello to be decommissioned in 2030. However, it recently submitted a new long-term resource plan to the Minnesota utility regulators staring its intention to extend the license ten more years to 2040. Recognizing that the future is uncertain with respect to the Xcel generating facility, the City of Monticello is actively working to diversity its tax base and increase employment with additional commercial and industrial businesses. This is important as not only Is Xcel Energy the largest employer within the community, it is also the largest tax payer in Monticello. Looking long-term, Monticello will have to seek other sources of revenue such as increased property taxes as the pending closure of Xcel nears. The City of Monticello collects approximately 30% of the total tax capacity generated within its municipal boundary. The remaining two thirds of the taxes are distributed to Wright County and the School District with the remaining ten percent being distributed to special taxing districts. The total net tax capacity for 2018 was $29,528,145. The City of Monticello collected approximately 30% of that amount resulting in $8,858,443 being collected by the City. In the same year Xcel had a tax capacity of $4,888,283 which amounted to 55% of the City's total annual tax base in 2018. The amount Xcel pays has been decreasing since 2016 due to changes in the formula for the determining of property valuations for generating stations. The percentage has also been decreasing due in part to the overall increase in tax capacity in Monticello as a result of recent development projects. This scenario is expressed in Table 6.4. In total Northern States Power has approximately 450 acres currently under site control with frontages on Interstate 94 as well as the Mississippi River. The land use for Xcel MNGP is reserved exclusively for their facility since they have now requested licensing through the year 2040. Mor t Dello Mall, 51m1e MonA<ellOGamber INCommerzP BtttAmeh9aog o rJ'IT_" -'v69s MONTICELLO 2040 VISION +PLAN 123 ECONOMIC SNAPSHOT 2020 The City of Monticello has been very successful in creating a strong and diversified economy by retaining jobs and employers. This success has allowed Monticello to begin the process of supplementing tax revenue to reduce the negative impacts from the eventual closure of the Xcel MNGP. The full build -out of the City owned Otter Creek Industrial Park will help this effort. The City of Monticello must also consider the future locations for new industrial uses and the timeline for those sites to be available for development. In 2020, the City of Monticello completed a feasibility study for the development of a number of areas focusing on the potential costs of the new development. One of the issues facing Monticello will be the speed at which sites may be available for development. Many companies have an expectation that sites are or can be readily available to allow for a fast turn -around of a project. If a community does not have sites available, they may lose the opportunity for new development. In addition to the attraction and retention of businesses, Monticello has also identified the importance of redevelopment to improve the image of the community. Key sites for redevelopment in the downtown are identified in the Downtown Small Area Plan. The plan notes that redevelopment may occur in quarter block increments, with revitalization also playing a role In the success of downtown. 1,412 6,332 6,359 M LivewBpe Ne Gry of Monticello but Employed Inside M Employed antl Live In the City of Mon(cello � LivemlM1e Cltyal Monticello bN EmployeE OlBitle 2W U S Cenms end Am e-, Community Sum, IHOLC Z.1: CII Y UY MUN IICLLLU UWNi UCCUVIEU HOUSING UNIT] By VAI UE Housing Value I Percent 2025' ,$50,000 177 4.8% 126 31% $50,000-$99,999 98 2.6% 48 1.2% $100.000-$149,999 249 67% 129 3.2% $150,000-$199,999 988 26.6% 744 18.3% $200.000- $249,999 989 26.6% 1,720 27.6% $250,000- $299,999 708 19.0% 1,017 25.1% $300,000- $399,999 411 11.0% 687 16.9% $400,000- $499,999 76 2.0% 141 3.5% $500,000- $749,999 20 0.5% 39 1.0% $750,000- $999,999 0 0.0% 0 0.0% $1.000.000- $1.499,999 o 0,0% o ao% $1,500,000- $1,999,999 4 0.1% 6 0.7% $2,000.000 0 0.0% 0 0.0% -Amiectlons pfovided b, URI fdfecastiry Of Rfnefiu,p COmmumlry Semng IFCSI data 1124 «t<if� ECONOMIC DEVELOPMENT IAHU 5.6: WRIGHI COUNTY OWNER OCCUPIED HOUSING UNITS BY VALUE Prcent 2025* Pefc� Housing Value 2020 ,$50,000 1.524 37% 1,096 2.5% $50,000-$99,999 928 2.3% 523 1.2% $100,000-$149,999 2,492 6.1% 1,361 3.1% $150,000-$199,999 6,934 170% 4,951 11.2% $200,000-7,960 $249,999999 19.5% 7,905 17.9% $250,9 $299,99999 7,646 187% 9,295 21.1% $300,000- $399,999 7,473 18.3% 10,244 23.2% $400.000- $499,999 2,915 71% 4,309 9.8% $500,000 $749,999 2.073 5.1% 3,098 7.0% $750000- $999,999 583 14% 870 2.0% $1,000,000- $1,499,999 191 0.5% 243 0.6% $1,500,000- $1,999,999 34 0.1% 46 01% $2.000.000- 138 0.3% 184 0.4% T,I,Npns p,00ded by ESRI kaM, 1111 or A.eIon U..m III SIM AS)data The City will need to evaluate opportunities for reinvestment and revitalization of the community in all areas. While this plan focuses growth in the core of the city, the plan also stresses the need to support reinvestment and improvements to keep existing residential, commercial and industrial areas strong. As buildings or neighborhoods throughout Monticello age, a mix of public and private investment will be needed to maintain the character and appearance of the city. The City of Monticello will strongly encourage reinvestment in the oldest residential neighborhoods surrounding downtown and along the river. WORKFORCE DEVELOPMENT The City of Monticello's strategy for workforce development is to enhance the skills of people already in working in Monticello, as well as provide tangible and relevant skills to those looking for employment. Continuing education opportunities and partnerships are both needed to implement this strategy and help Monticello residents, and potential future residents, find a range of education and training opportunities to meet their professional goals. An inadequate workforce development and training program will lead to people looking for jobs elsewhere. The is evident by the number of people living in Monticello but leaving the City to work. Workforce development also affects the Monticello's ability to retain and attract new employees. This can be accomplished by ensuring a quality educational system, lifecycle housing opportunities, strong relationships with existing businesses to assist in the promotion of employment opportunities, and the continued growth of livable wage employment opportunities. Currently, there are 6,332 employees that work in the City but live elsewhere. In addition, an almost equal amount of residents, 6,359, leave the City on a daily basis to work somewhere else. The City has the potential to capture dollars from People outside of Monticello who work in the City. This will help drive the local economy but the City must also understand the need to retain these employees and attract them to Monticello by offering a wide range of housing options. Prior to planning for future housing options it's important to have a clear understanding of the existing housing stock in the community. MONTICELLO 2040 VISION +PLAN 125 The flow of employees to jobs outside of the City, or into the City while living in a different area occurs for several reasons. Attracting employees can be the result of livable wage positions that may not be available in the areas that they live. It can also be a result of the employee being attached to their existing community because of the school system, family, or other personal reasons. Another issue that can affect the attraction of employees to a community is the availability of housing to meet their needs. As families move through their career paths and family status, their housing needs change and will rely on communities to provide that lifecycle housing. WORKFORCE HOUSING As a city actively developing, Monticello is taking a careful yet proactive approach to planning land use and density to ensure adequate amounts of land are guided to provide opportunities for a full range of"life cycle' housing options. The City is especially looking for opportunities to develop a range of life-cyle and "step- up" housing options as a way to attract new industrial development and jobs that offers higher paying wages. Existing Housing Value Assessment The measure of affordability of a housing unit compares housing cost to gross household income. The general standard is that housing is affordable if housing expenses equal 30% or less of a person's gross household income. Tables 6.5 and 6.6 demonstrates the value of the City of Monticello's housing stock in comparison to the entirety of Wright County. Notably, 46% of the City of Monticello's housing stock is valued between $150,000 -$250,000 compared to 29% of Wright County housing stock of the same value (refer to Table 6.5 and 6.6). This aligns with the data that suggests housing prices are increasing in Monticello compared to the County. It is important that a range of affordable housing stock in the community is maintained while also providing housing products in the higher values as well. Affordable Workforce Housing The City completed (2020) a comprehensive housing study that assesses the housing needs for the community. It is imperative that any successful economic development policies and strategies allow for the development of life -cycle housing to allow for the continued growth of the community. The policies and strategies from the housing study have been incorporated into this plan. A generally accepted standard is that in order to develop new affordable housing, the development needs to be a minimum of eight units per acre. Based on the City's future land use plan 986 acres would allow for residential development at eight units or more per acre. While the City has created a land use plan that permits areas at greater density, barriers to development of affordable housing still exist. Some of these barriers are beyond the City's control including, but not limited to: Steodyincreases in land prices and State and County tax structures Increase in construction costs. When combined with land prices, it becomes more difficult to provide affordable units through new construction. Property constraints from wetlands, woodlands, soils, poor access or others. Availability of regional public transit options within the City. The goals, policies, and strategies section includes specific efforts to pursue as it relates to offering a range of affordable housing options. ECONOMIC DEVELOPMENT ISSUES AND OPPORTUNITIES In the next 20 years the City will face a variety of issues as well as opportunities related to economic development. Many of these issues are larger in scale and will require regional and state partners to address them, especially as related to transportation and infrastructure. Tax Base Diversification One of the primary issues facing the City will be sourcing new tax revenue and normalizing the City's financial system. The City's tax base relies heavily on the Xcel MNGP which is a finite revenue stream and will eventually be gone. Communities with diverse tax bases are resilient to shifts and fluctuations in the economy more so than communities that have a single large taxpayer or a majority of businesses in a single industry or sector. When the generating station is excluded from the equation, the City's largest single taxpayer makes up only 2.3% of the total tax capacity. This allows the city to have significant stability as it replaces the Xcel MNGP taxes. However, this diversity requires the community to look to multiple projects to help fill the pending gap but also allows for the development of industry clusters to provide both tax base and employment opportunities. 126 ECONOMIC DEVELOPMENT Workforce Development The success of workforce development requires that the City develop a plan for development and training of the required work force. Creating and maintaining strong relationships with businesses is critical to identify needs and assist with the coordination between the training institutions to teach the required skills. This will also help identify potential funding sources further strengthening those relationships. The attraction of new livable wage employment opportunities is important to allow for the continued success of the local economy as well as attraction of new businesses and employment opportunities. The retention of existing businesses and employees in the community will maintain a workforce and help attract the needed workers to fill these positions. Workforce Housing The City has a limited number of step-up type housing and senior housing units. The community does have a significant number of "entry" level housing which limits the community's ability to retain residents that seek housing units with a greater level of amenities. These residents, while working in Monticello, live in the surrounding communities resulting in the City losing the opportunity to benefit from the retail spending and additional tax base of higher value homes. In addition to the shortage of move up housing, the City also has a limited number of senior housing opportunities. This limited supply results in older residents staying in their homes and those homes not being available for new residents. If the older residents move to another community for housing, Monticello loses their retail activity which is generally higher than younger residents further reducing growth and economic stability. The city also has a limited number of multi -family units to allow for the workforce required for the jobs that are being created through the expansion and attraction of businesses. As people are changing or beginning their careers, finding affordable housing is a pressing need and can be a primary factor in their success or failure. Regardless of the success of creating employment opportunities, if workers cannot live in the community and become part of the socio-economic fabric of the community, then the success will be short lived. Transportation Improvements Monticello will continue to plan for the completion of its comprehensive roadway and pathway system. Transportation costs are a major factor for businesses evaluating new locations. A well-maintained transportation network connected to the larger regional network will be critical for attracting new business and diversifying to warehousing and distribution sectors. The continued planning and development of the transportation system improvements including a potential interchange with major transportation arteries will also allow for the continued growth of Monticello. The City will also need to commit resources to the continued maintenance of the existing infrastructure to support the local economy. Bridge Traffic Presently, State Highway 25 is the only river crossing in the City and greater region. A new bridge crossing would help alleviate traffic congestion on Highway 25 and also provide options for emergency access. However, Highway 25 results in motorists traveling through the City's downtown that serve as possible customers for local businesses. Transportation improvements could alleviate some congestion and also improve east/west walkability through downtown Monticello. A new bridge in the region is a long term improvement and requires considerable investment and additional study, but would also will reduce the amount of traffic flowing through downtown, especially on the weekends. Monticello needs to continue to be an active member in the Central Mississippi River Regional Planning group as they work towards siting and eventually development of a new river crossing to maximize the benefit to the City. COWD-19 Pandemic Response The City proactively responded to the business community to support business operations during the global COVID-19 pandemic. The City approved temporary loan forbearance requests and an emergency grant program to assist those businesses with outstanding loans that have been negatively affected by the pandemic. This loan forbearance helped to ensure employers continue to retain employees. The long-term effects of the pandemic will not be known until after adoption of this plan. MONTICELLO 2040 VISION + PLAN 127 AREAS OF ECONOMIC DEVELOPMENT FOCUS AND INVESTMENT The following areas represent opportunities in the city to help drive economic growth and further support the community's goals related to economic development. 1. Industrial Land: This comprehensive plan designates approximately 1,600 acres of land for industrial uses, including land within the Northwest area, south along Highway 25, and in the Otter Creek Business Park. In 2020, the City completed an industrial feasibility study evaluating these areas in greater detail for their industrial potential. In alignment with the goals and policies of this chapter, the City should actively pursue the development of additional industrial land through business attraction. 2. Oakwood Industrial Park: In alignment with the goals for advancement of living wage employment and intensification of tax base, there is opportunity to convert some parcels within Oakwood Industrial Park to light manufacturing from their current heavy industrial uses and/or convert large areas of unused land or outdoor storage. The City should explore opportunities to use State redevelopment grants and rehabilitation programs for these sites. 3. 1.94 Interchange and Highway 25 interchange Area: The land uses and parcel configurations in these key intersection areas may not be optimal. The City should be prepared to work with property owners and developers as market opportunities arise to better align these visible areas for future reinvestment and/or redevelopment. 4. Downtown: The Downtown area, identified as Downtown Mixed Use in this plan, represents a focused opportunity area. This includes specific attention on the Walnut Corridor, Block 52, Block 34, and the Northeast corner of Cedar Street and Broadway. Opportunities for improvement include land uses consistent with the Downtown Small Area Plan as well as streetscape, landscape and circulation improvements. 5. Mixed Neighborhood Areas: The City should work to maintain the oldest residential neighborhoods in areas adjacent to the Downtown. Efforts should be made to maintain housing choices, redevelopment where appropriate, the introduction of neighborhood centers and the possible introduction of local specialty retail where appropriate. Highway 25 Corridor South: There are a number of areas and sites that could present reinvestment and/or redevelopment opportunity along Highway 25 south between 1-94 and School Boulevard. The Economic Development Authority )EDA) should continue to work with property owners on their desire to sell, redevelop and reinvest in their sites for commercial development. Mo1111¢II0 Coss ng A111m$nti CminlI Vll,g Tow,Wme, S.,,, Clryor Monticello 128 <(S�(�t(S<(�(« ECONOMIC DEVELOPMENT OPPORTUNITY FOCUS AREAS I 101s11al lald Q Gly of Monticello Boundary 2 03kwoo01nduslnal Park J Manurello OWerly Anneaabon tea IMOAQ 3 Nterstate 99lHighwayi5lnterchange M00aello TOM01p Boundary a.Ommbvm Parsers 5. Meed NelghborhppO Meas O Spee¢ 6, HtgMq 25 Cprritldr 500h ou Ragmad Water Bodies Opporlpmry Faaus Areas `_ \�o are ol I_ ............ ......................... ........... _........ .........................._............ ..: 0 �. o v MONTICELLO 2040 VISION +PLAN 129 ECONOMIC DEVELOPMENT GOALS Listed below are the economic development goals which were informed by the Community Vision. For the complete set of policies and strategies for the goals refer to the Implementation Chapter.. GOAL 1: BUSINESS ATTRACTION AND RETENTION Nocton progrom that attracts new businesses and retains existing businesses. GOAL 2: TAX BASE EXPANSION A stable and expanding tax base that diversifies the city's economyand creates a sustainable employment to offset the eventual closure of the Xcel Monticello Nuclear Generating Plant. GOAL 3: DOWNTOWN VITALITY nln City's economic development and housing objectives. GOAL 4: REDEVELOPMENT AND REINVESTMENT with meeting the City's economic development, land use and community design objectives. GOAL 5: LIFECYCLE HOUSING Monticello wi tle variety of housing options that includes workforce, shorter, step up, and senior housing to allow for new and existing residents GOAL 6: WORKFORCE DEVELOPMENT skills and knowledge needed for a wide range ofjobs and opportunities. GOAL 7: PROMOTION AND PARTNERSHIPS Development Projects, programs and Activities. GOAL 8: OPPORTUNITY FOCUS AREAS Reinvestment, redevelopment and overall improvement of the opportunity focus areas within the City. MONTICELLO 2040 VISION t PLAN 731 EDA Agenda: 02/23/22 5. Consideration of Adopting Resolution #2022-03 Authorizing Establishment of Affordable Housing Tax Increment Financing (TIF) District 1-42 (Headwaters Development 108 -unit Apartment Project) within the Central Monticello Redevelopment Prosect No.1; and the adoption of the Tax Increment Financing Plan relating thereto (1T) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution #2022-03 approving the establishment of TIF District 1-42 (Headwaters Apartment Project) within the Central Monticello Redevelopment Project No. 1, and the adoption of the TIF Plan relating thereto. A TIF Application was received from Headwaters Development in November 2021. The developer is seeking public financial assistance for its proposal to construct a 108 -unit rental multi -family housing facility, with approximately 75 on -grade and 100 covered parking stalls. The project is to be located on the western portion of a land parcel known as Outlot A, Country Club Manor, at the corner of Golf Course Road and 7th Street West within the City. The EDA has owned this 16.71 -acre property for some time. Due to the costs associated with the land acquisition and development of the building, the developer is seeking public financial assistance from the EDA in the form of pay -go tax increment financing assistance and conveyance of the site to the developer from the EDA. The tax increment revenue is proposed to come from a newly established affordable housing district, TIF District No. 1- 42. Subject to approval of the request for public financial assistance, the developer plans to commence construction by May 1, 2022, and substantially complete construction by December 31, 2023. The total cost of the project is estimated at approximately $23.6 million or $218,518 per unit based on the developer's most recent pro forma as of December 2021. The developer's request for public financial assistance is to assist with the extraordinary costs of development and construction of the new housing. Headwaters Development has indicated that it will not proceed with the proposal without the approval of the requested public financial assistance. In a related sister proposal, Headwaters Development is also proposing to develop 60 rental twin - homes on 30 pad sites (Villas) on the easterly portion of the EDA owned parcel. Due to slightly different developer ownership interests, the Villas will be presented as a separate TIF District (1-43) consideration. Relating to the tax increment financing assistance, the developer is committing to creating and maintaining 40% of the units as affordable through the life of the district. The last affordable housing TIF District (#1-40) was established in June 2018 for the 47 -unit Rivertown Residential Suites apartment developed by the Briggs Companies. It is in the core of EDA Agenda: 02/23/22 downtown on Block 36, and it received a Certificate of Occupancy in May 2020 and a Certificate of Completion in the fall of 2020. State statutes for TIF review steps include a public hearing to be held by the City Council. That Public Hearing was held on February 14, 2022, followed by the adoption of a Resolution establishing TIF District 1-42 and approving the TIF Plan. In addition to the EDA approving the TIF District and Plan, it will consider a Development Contract and Land Sale (Purchase and Development Contract) with Headwaters Development in April or early May 2022 pending receipt of land appraisal information and the outcome of final negotiations of the deal terms with the developer over the next 30 to 45 days. A timeline of the TIF review and approval steps to date by the EDA and City Council includes: ✓ November 29, 2021 Receipt of the Headwaters Development TIF Application ✓ December 8, 2021 EDA reviews the TIF application and accepts it ✓ December 8, 2021 EDA approves resolution requesting the City Council call for a Public Hearing for consideration of approving an Affordable Housing TIF District (1-42) ✓ December 13, 2021 City Council approves resolution calling for a February 14, 2022 Public Hearing wherein it allows public comment and discusses establishing TIF District 1-42 in support of Headwaters Development's apartment proposal ✓ February 14, 2022 City Council holds Public Hearing; Approves Resolution Establishing TIF District 1-42 and the TIF Plan relating thereto A TIF review and approval calendar is also attached to this report as Exhibit D. Al. STAFF IMPACT: Staff involved in the proposed TIF District consideration include the Community Development Director, Economic Development Manager, EDA attorney, and the City's financial advisor. No additional staff are needed to complete the TIF review and approval process. An estimate of the total hours involved in the TIF review and approval process to date by both in-house and consultant staff is between 80 to 85 hours. Additional hours will accrue through the date of certification with Wright County. A2. BUDGET IMPACT: The impact related to EDA consideration of TIF District 1-42 and the Plan relating thereto should be minimal. All consultant fees (legal and financial advisory) should be covered by Headwaters Development. The developer submitted the required TIF application fee of $10,000 in late November with the packet of materials. Costs incurred above and beyond that amount will be invoiced to the developer. The impact of the Ua EDA Agenda: 02/23/22 proposed development project offers a positive impact in that the EDA has an opportunity to sell a parcel of land for a market rate price using the mechanics of the pay -go TIF District increment capture. Over time, the captured increment will flow into the EDA General Fund for the negotiated price of the 16.71 -acre parcel, which will allow it to pursue other worthwhile housing and industrial development projects in the future. Also, Headwaters is not requesting a waiver of standard fees such as SAC, WAC, Trunk Fees, Park Dedication, etc. Ultimately, TIF increments are derived from new tax revenue from "new development" valuation. A3. COMPREHENSIVE PLAN IMPACT: The Vision adopted as part of the Monticello 2040 Plan is to create a friendly and safe community which is inclusive and fosters a sense of belonging. The city has adopted a strategy for housing which includes developing a range of housing choice and opportunity. As residents move through their career paths and family status, their housing needs change. As an actively developing community, Monticello seeks to provide opportunities for a full range of "life cycle" housing options allowing them to stay and grow with our community. This proposal meets a specific housing need in the community, which is further supported by the 2020 Housing Study. The proposed project also meets the Monticello 2040 goal for growing from within, as it is also located within the city on an underutilized parcel of land. A. ALTERNATIVE ACTIONS 1. Motion to adopt Resolution #2022-03 authorizing establishment of Tax Increment Financing District 1-42 and adopting a Tax Increment Financing Plan therefor related to the Headwaters Development rental apartment proposal. 2. Motion to table consideration of Resolution #2022-03 for further research and/or discussion. B. STAFF RECOMMENDATION Staff recommends the EDA adopt Resolution #2022-03 establishing the Affordable Housing TIF District (1-42) supporting the Headwaters Development senior apartment proposal and approving the TIF Plan relating thereto. The developer has indicated that it will not move forward with the proposal unless it can secure TIF assistance to help offset the extraordinary costs related to the parking structure and overall development components including grading, utility extensions and site excavation. The developer is proposing to develop rental units aimed at filling the market demand for seniors (ages 55+). C. SUPPORTING DATA: A. Resolution #2022-03 B. TIF #1-42 Plan EDA Agenda: 02/23/22 Summary - Headwaters Development 7th St. West Housing Proposal TIF #1-42 Review and Approval Calendar CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-03 RESOLUTION APPROVING THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-42 AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED By the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Board proposes to establish Tax Increment Financing District No. 1-42 (Headwaters Apartments Project) (the "TIF District") within Central Monticello Redevelopment Project No. 1 (the "Project") and adopt a Tax Increment Financing Plan for the TIF District (the "TIF Plan"), pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, as amended, and Sections 469.174 to 469.1794, as amended (collectively, the "Act"). 1.02. Authority staff and consultants have prepared the TIF Plan for consideration by the Board and by the City of Monticello (the "City"). 1.03. Following approval of the TIF Plan by the City after a duly noticed public hearing, the Authority and the City will have performed all actions required by law to be performed prior to the establishment of the TIF District and the adoption and approval of the proposed TIF Plan, including, but not limited to, notification of the commissioner of Wright County, Minnesota ("Wright County") representing the area included in the TIF District, notification of Wright County and Independent School District No. 882, and approval of the TIF Plan by the City's planning commission. Section 2. Approval of TIF District No. 1-42 and TIF Plan; Further Actions. 2.01. The Board hereby finds that the TIF District is a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or portions of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 2.02. The Authority hereby finds that the TIF District is in the public interest, and finds that the TIF Plan conforms in all respects to the requirements of the Act and that the establishment of the TIF District and adoption of the TIF Plan will help provide increased housing opportunities in the City, and thereby serves a public purpose. 2.03. The Authority further finds that the TIF Plan will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the redevelopment or development of the Project by private enterprise in that the intent is to provide only that public assistance necessary to make the private development financially feasible. 526348v1 MNI MN190-156 2.04. The Authority hereby approves the TIF Plan for the TIF District, subject to approval thereof by the City Council following its public hearing thereon. 2.05. Subject to approval of the TIF Plan and establishment of the TIF District by the City Council, Authority staff and consultants are authorized and directed to proceed with the implementation of the TIF Plan 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 TIF Plan does not constitute approval of any project or a development agreement with any developer. Adopted by the Board of Commissioners of the City of Monticello Economic Development Authority this 23' day of February, 2022. President ATTEST: Executive Director 2 526348v1 MNI MN190-156 DRAFT CITY OF MONTICELLO, MINNESOTA TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 (HEADWATERS APARTMENT PROJECT) CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 PROPOSED TO BE ADOPTED BY CITY OF MONTICELLO AND CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (EDA) PUBLIC HEARING DATE: , 2022 PLAN APPROVED BY EDA DATE: , 2022 PLAN APPROVED BY CITY COUNCIL DATE: , 2022 PLAN CERTIFICATION REQUEST DATE: , 2022 PLAN CERTIFIED DATE: , 2022 NORTHLAND y SECURITIES Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, MN 55402 (800)851-2920 Member NASD and SIPC Registered with SEC and MSRB TABLE OF CONTENTS ARTICLE I - INTRODUCTION AND DEFINITIONS.........................................................1 Section 1.01 Introduction......................................................................................1 Section 1.02 Definitions.........................................................................................1 Section 1.03 Plan Preparation...............................................................................1 ARTICLE II - TAX INCREMENT FINANCING PLAN.........................................................2 Section 2.01 Statutory Authority..........................................................................2 Section 2.02 Planned Development.....................................................................2 2.02.1 Project Description......................................................................................3 2.02.2 City Plans and Development Program .................................................... 3 2.02.3 Land Acquisition.........................................................................................3 2.02.4 Development Activities..............................................................................2 2.02.5 Need for Tax Increment Financing........................................................... 2 Section 2.03 Tax Increment Financing District...................................................3 2.03.1 Designation.................................................................................................. 3 2.03.2 Boundaries of TIF District..........................................................................3 2.03.3 Type of District............................................................................................3 Section 2.04 Plan for Use of Tax Increment........................................................3 2.04.1 Estimated Tax Increment............................................................................3 2.04.2 Project Costs.................................................................................................4 2.04.3 Estimated Sources and Uses of Funds.....................................................5 Figure2-1......................................................................................................5 2.04.4 Administrative Expense.............................................................................5 2.04.5 County Road Costs.....................................................................................6 2.04.6 Bonded Indebtedness................................................................................. 6 2.04.7 Election of First Year of Increment and Duration of TIF District ......... 6 2.04.8 Estimated Impact on Other Taxing Jurisdictions...................................6 2.04.9 Prior Planned Improvements.................................................................... 7 ARTICLE III -ADMINISTERING THE TIF DISTRICT......................................................7 Section 3.01 Filing and Certification....................................................................7 Section 3.02 Modifications of the Tax Increment Financing Plan....................7 Section 3.03 4 -Year Knockdown Rule..................................................................8 Section 3.04 Pooling/5-Year Rule..........................................................................8 Section 3.05 Financial Reporting and Disclosure Requirements .....................8 Section 3.06 Business Subsidy Compliance........................................................8 EXHIBITS........................................................................................................................... 9 Exhibit I - Present Value Analysis............................................................................9 Exhibit II - Projected Tax Increment......................................................................10 Exhibit III - Impact on Other Taxing Jurisdictions..............................................11 Exhibit IV - Estimated Tax Increment Over Life of District...............................12 Exhibit V - Map of TIF District...............................................................................13 Exhibit VI - Map of Central Monticello Redevelopment Project No. 1 ............14 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 ARTICLE I — INTRODUCTION AND DEFINITIONS SECTION 1.01 INTRODUCTION The City of Monticello and the City of Monticello Economic Development Authority propose to provide tax increment financing assistance through the establishment of Tax Increment Financing (Housing) District No. 1-42 to assist with the financing of certain project costs for the construction of an approximate 108 -unit rental multi -family housing facility, with an affordable component, by a private developer. This document contains the plan for achieving the objectives of the Central Monticello Redevelopment Project No. 1 through the establishment of Tax Increment Financing District No. 1-42. SECTION 1.02 DEFINITIONS For the purposes of this document, the terms below have the meanings given in this section, unless the context in which they are used indicates a different meaning: 1. "Authority" means the City of Monticello Economic Development Authority. 2. "City" means the City of Monticello, Minnesota. 3. "City Council" means the City Council of the City. 4. "County" means Wright County, Minnesota. 5. "Developer" means the private party undertaking construction of the Project within the TIF District. 6. "Public Development Costs" means the cost of the development activities that will or are expected to occur within the Project Area or the TIF District. 7. "Project" means the construction by the Developer of an approximate 108 -unit rental multi- family housing facility for seniors, with approximately 75 on -grade and 100 covered parking stalls, to be located at the corner of Golf Course Road and 7th Street West within the City. 8. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project, as the same may, from time to time, be amended or supplemented. 9. "Redevelopment Project" means Central Monticello Redevelopment Project No. 1 of the Authority, as the same may, from time to time, be amended or supplemented. 10. "School District" means Independent School District No. 882 (Monticello Public Schools). 11. "State" means the State of Minnesota. 12. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, both inclusive. 13. "TIF District" means Tax Increment Financing (Housing) District No. 1-42 (Headwaters Apartment Project). 14. "TIF Plan" means the tax increment financing plan for the TIF District (this document). SECTION 1.03 PLAN PREPARATION The document was prepared for the City and the Authority by Northland Securities, Inc. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 ARTICLE II - TAX INCREMENT FINANCING PLAN SECTION 2.01 STATUTORY AUTHORITY The TIF District and the TIF Plan are established under the authority of the TIF Act. SECTION 2.02 PLANNED DEVELOPMENT 2.02.1 Project Description The Project includes construction of an approximate 108 -unit rental multi -family housing facility for seniors, with approximately 75 on -grade and 100 covered parking stalls, to be located at the corner of Golf Course Road and 7th Street West within the City. The proposed four-story apartment building will include approximately 16 studio units, 64 one -bedroom units, and 28 two-bedroom units, with an affordable rent component. The property where the Project will be built is currently vacant and owned by the Authority. 2.02.2 City Plans and Development Program In addition to achieving the objectives of the Redevelopment Plan, the Project is consistent with and works to achieve the development objectives of the City. The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of property. The proposed development plans for the Project in the TIF District have been reviewed by the Planning Commission and the City Council. 2.02.3 Land Acquisition The Authority owns the land within the TIF District. The Authority plans to sell/convey land to the Developer for the Project. 2.02.4 Development Activities As of the date of approval of this TIF Plan, there are no development activities proposed in this TIF Plan that are subject to contracts. 2.02.5 Need for Tax Increment Financing In various materials the Developer has demonstrated that the proposed use of tax increment financing is needed to offset the high construction costs of high-quality low- to moderate - income housing and associated infrastructure required to support the facility. Without the proposed assistance, these initial up -front costs would make it infeasible for the Developer to be able to charge the affordable rents required for low -to moderate -income residents. Thus, it is the opinion of the City and the Authority that the proposed development would not reasonably be expected to occur solely through private investment within the foreseeable future and that 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 the market value estimated to result from the proposed development after subtracting the present value of the estimated tax increments for the maximum duration of the TIF District permitted by the TIF Plan. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed as described above and is shown in Exhibit I. This analysis, which is not required by the TIF Act for approval of a housing district, indicates that the increase in estimated market value of the proposed development (less the present value of the estimated tax increments for the maximum duration permitted by the TIF Plan) exceeds the estimated market value of the site prior to the establishment of the TIF District. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 SECTION 2.03 TAX INCREMENT FINANCING DISTRICT 2.03.7 Designation This TIF District is designated Tax Increment Financing (Housing) District No. 1-42 (Headwaters Apartment Project). 2.03.2 Boundaries of TIF District The boundaries of the TIF District are depicted in Exhibit V. The TIF District will include a portion of what is currently parcel 155-033-900-010, along with the adjacent roads and right-of- way. The property to be included within the TIF District is described as follows: • [A description of the property is being prepared and will be inserted here.] The property will need to be platted and a new parcel identification number assigned by the County prior to the certification of the TIF District. 2.03.3 Type of District The TIF District is designated as a "housing" district pursuant to Section 469.174, subdivision 11 of the TIF Act. For the designation, of a tax increment financing housing district, the Developer of the Project will need to commit to the following: 1. Satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. This requirement applies for the duration of the tax increment financing district. The Fiscal Year 2021 Area Median Family Income (AMI) for the County is $104,900. The developer will commit to provide (a) 40% or more of units for occupancy by persons at 60% or less of AMI (based on household size). These income thresholds may change over the life of the TIF District. 2. Provide that no more than 20% of the square footage of building to receive assistance from tax increments consist of commercial, retail, or other nonresidential uses. Revenue derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in Section 469.174, subdivision 11 of the TIF Act. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the Authority may be included in the cost of a housing project. 3. Failure to comply with these income limitations is subject to the enforcement provisions of Section 469.1771 of the TIF Act. SECTION 2.04 PLAN FOR USE OF TAX INCREMENT 2.04.7 Estimated Tax Increment The original net tax capacity of value of the TIF District will be set by the County upon request for certification. For the purposes of this Plan, the estimated original net tax capacity is $899. This amount is estimated based on the most recent published estimated market value of $386,137 for Parcel 155-033-900-010; with tax capacity value calculated for residential rental property and the assumption that 18.6% of the valuation of this existing parcel will be attributed to the new parcel that will be established for the Project and included in the TIF District. The total tax capacity value of the property for the first estimated year of tax increment (for taxes payable in 2025) is estimated to be $163,620. This amount is based on a total estimated market value of $13,089,600 with property classified as residential rental property. The estimated difference between the total tax capacity value after development completion (for taxes payable in 2025) and the original net tax capacity value is the captured tax capacity value ($162,721) for the creation of tax increment. The total local tax rate for taxes payable in 2021 is 95.949%. The TIF Plan assumes that this rate DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 will be set as the original local tax rate for the TIF District. At the time of the certification of the original net tax capacity for the TIF District, the county auditor shall certify the original local tax rate that applies to the TIF District. The original local tax rate is the sum of all the local tax rates, excluding that portion of the school rate attributable to the general education levy under Minnesota Statutes section 126C.13, that apply to a property in the TIF District. The local tax rate to be certified is the rate in effect for the same taxes payable year applicable to the tax capacity values certified as the TIF District's original tax capacity. The resulting tax capacity rate is the original local tax rate for the life of the TIF District. Under these assumptions, the estimated annual tax increment will be $156,129 in the first year of tax increment collection. The actual tax increment will vary according to the certified original tax capacity value and original tax rate, the actual property value produced by the proposed development and the changes in property value and State tax policy over the life of the district. It is the intent of the City and the Authority to retain 100% of the captured tax capacity value for the duration of the TIF district. Exhibit II contains the estimated tax increment over the life of the District. 2.04.2 Public Development Costs The Authority will use tax increment to pay Public Development Costs. The Authority anticipates the use of tax increment to pay administrative expenses for the TIF District and to reimburse the Authority and the Developer on a pay -go basis for Public Development Costs. A contract between the Authority and the Developer will define the means for verifying Public Development Costs to be incurred by the Developer that will be eligible for reimbursement from tax increments and the means of disbursing tax increments collected by the Authority to the Developer. The Authority may also use tax increments to pay financing costs. The interest rate payable on bonds, the definition of bonds includes tax increment financing revenue notes, to be issued will be set pursuant to a contract with the Developer. The City and the Authority reserve the right to modify the TIF Plan to provide authority to expend tax increment from the TIF District on other qualified housing projects that meet the criteria for establishing a housing TIF district. Section 469.174, subdivision 11 of the TIF Act defines a housing district as consisting of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income. The requirements for the establishment of a housing TIF district are contained in Section 469.1761 of the TIF Act. The primary criteria are income related. The criteria are different for owned and rental housing. The practical application of this authority includes: • The use of tax increment is not limited by pooling restrictions or the five-year rule. • The tax increment can be spent on activities outside of the TIF district, but within the Development District No. 1. • This authority does not extend the maximum statutory duration of the TIF district. • The tax increment must be used solely to finance the cost of the "housing project" as defined by the TIF Act. The cost of public improvements directly related to the housing project and the allocated administrative expenses of the Authority may be included in the cost of the housing project. • No more than 20% of the square footage of buildings that receive TIF assistance may consist of commercial, retail, or other nonresidential uses. Potential applications of this authority include: • Individual housing projects avoiding the need for a new TIF district. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 4 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 • Supplementing the revenues of another housing TIF district. • Assistance for the renovation of existing housing. • Acquisition of land for housing. • Assistance to make public improvements more affordable. 2.04.3 Estimated Sources and Uses of Funds The estimated sources of revenue, along with the estimated Public Development Costs of the TIF District, are itemized in Figure 2-1 that follows. Such costs are eligible for reimbursement from tax increments from the TIF District. The City and Authority reserve the right to administratively adjust the amount of any of the Estimated Tax Increment Project Cost line items listed in Figure 2-1, so long as the total Estimated Tax Increment Project Costs amount, not including financing costs, is not increased. FIGURE 2-1 ESTIMATED SOURCES AND USES OF FUNDS Total Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the County 4,596,000 Interest and investment earnings 50,000 Sales/lease proceeds - Market value homestead credit - Total Estimated Tax Increment Revenues 4,646,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition 384,760 Site improvements/preparation costs - Utilities - Other public improvements - Construction of affordable housing 2,791,240 Small city authorized costs, if not already included above - Administrative costs 100,000 Estimated Tax Increment Project Costs 3,276,000 Estimated financing costs Interest expense 1,370,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment 4,646,000 Estimated Financing Total amount of bonds to be issued 2.04.4 Administrative Expense 4,646,000 The Authority reserves the right to spend up to ten percent (10%) of tax increment revenues distributed from the County on qualified administrative expenses pursuant to the requirements in the TIF Act. The Authority will use these monies to pay for and reimburse the Authority for costs of administering the TIF district allowed by the TIF Act. The estimated amount of tax DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 5 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 increment revenue planned to pay administrative expense is shown in Figure 2-1. Anticipated administrative expenses of the TIF District include annual audit of the fund for TIF District, preparation of annual reporting, legal publication of annual report, and administration of the development agreement, among other qualified purposes. 2.04.5 County Road Costs The proposed development will not substantially increase the use of county roads and necessitate the need to use tax increments to pay for county road improvements. 2.04.6 Bonded Indebtedness The total amount of bonds estimated to be issued is shown in Figure 2-1. The City will not issue any general obligation bonded indebtedness as a result of the TIF Plan. The Authority intends to use tax increment financing to reimburse the Developer on pay-as- you-go basis for Public Development Costs pursuant to a contract with the Developer. The City or the Authority may advance or loan money to finance expenditures under Section 469.176, subdivision 4 of the TIF Act, from the general funds of the City or the Authority or any other fund under which there is legal authority to do so, subject to the following provisions: (a) Not later than 60 days after money is transferred, advanced, or spent, whichever is earliest, the loan or advance must be authorized by resolution of the City or of the Authority, whichever has jurisdiction over the fund from which the advance or loan is authorized. (b) The resolution may generally grant to the City or the Authority the power to make interfund loans under one or more tax increment financing plans or for one or more districts. The resolution may be adopted before or after the adoption of the tax increment financing plan or the creation of the tax increment financing district from which the advance or loan is to be repaid. (c) The terms and conditions for repayment of the loan must be provided in writing. The written terms and conditions may be in any form, but must include, at a minimum, the principal amount, the interest rate, and maximum term. Written terms may be modified or amended in writing by the City or the Authority before the latest decertification of any tax increment financing district from which the interfund loan is to be repaid. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or 549.09 are from time to time adjusted. Loans or advances may be structured as draw- down or line -of -credit obligations of the lending fund. (d) The Authority shall report in the annual report submitted under Section 469.175, subdivision 6 of the TIF Act: (1) the amount of any interfund loan or advance made in a calendar year; and (2) any amendment of an interfund loan or advance made in a calendar year. 2.04.7 Election of First Year of Increment and Duration of TIF District The duration to collect and spend tax increments on eligible purposes is set at the maximum duration of 25 years after the date of receipt of the first tax increment or 26 years of tax increment collection. The first year of increment is elected to be year 2025. Based on the elected first year of increment, the estimated decertification date is 12/31/2050. 2.04.8 Estimated Impact on Other Taxing Jurisdictions Exhibits III and IV show the estimated impact on other taxing jurisdictions if the maximum DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 6 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 estimated retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City and the Authority believe that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The City and the Authority anticipate minimal impact of the proposed development on city -provided services. A manageable increase in water and sewer usage is expected. It is anticipated that there may be a slight but manageable increase in police and fire protection duties due to the development. 2.04.9 Prior Planned Improvements There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. The Authority will include this statement with the request for certification to the County Auditor. ARTICLE III —ADMINISTERING THE TIF DISTRICT SECTION 3.01 FILING AND CERTIFICATION The filing and certification of the TIF Plan consists of the following steps: 1. Upon adoption of the TIF Plan by the City and the Authority, the Authority shall submit a copy of the TIF Plan to the Minnesota Department of Revenue and the Office of the State Auditor. 2. The Authority shall request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. SECTION 3.02 MODIFICATIONS OF THE TAX INCREMENT FINANCING PLAN The City and the Authority reserve the right to modify the TIF District and the TIF Plan. Under the TIF Act, the following actions can only be approved after satisfying all the necessary requirements for approval of the original TIF Plan (including notifications and public hearing): 1. any reduction or enlargement of geographic area of the Project or TIF District that does not meet the requirements of Section 469.175, subdivision 4, paragraph (e) of the TIF Act. 2. increase in amount of bonded indebtedness to be incurred; 3. a determination to capitalize interest on the debt if that determination was not a part of the original plan; 4. increase in the portion of the captured net tax capacity to be retained by the Authority; 5. increase in the estimate of the cost of the Project, including administrative expenses, that will be paid or financed with tax increment from the TIF District; or 6. designation of additional property to be acquired by the Authority. Other modifications can be made by resolution of the Authority. In addition, the original approval process does not apply if (1) the only modification is elimination of parcels from the TIF District and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City and the DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 7 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 Authority agree that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. Upon approval by the City, the Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. SECTION 3.03 4 -YEAR KNOCKDOWN RULE Since the TIF District is anticipated to consist of a single parcel, development of the Project as planned prevents any loss of value from the 4 -Year Knockdown Rule. The 4 -Year Knockdown Rule requires that if after four years from certification of the TIF District no demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the City, Authority, or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. SECTION 3.04 POOLING/5-YEAR RULE As permitted under Section 469.1763, subdivision 2(b) and subdivision 3(a)(5) of the TIF Act, any expenditures of increment from the TIF District to pay the cost of a "housing project" as defined in Section 469.174, subdivision 11 of the TIF Act will be treated as an expenditure within the district for the purposes of the "pooling rules" and the "five year rule". It is not anticipated that tax increments will be spent outside the TIF District (except allowable administrative expenses), but such expenditures are expressly authorized in the TIF Plan. SECTION 3.05 FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS The Authority will comply with the annual reporting requirements of the TIF Act pursuant to the guidelines of the Office of the State Auditor. Under current law, the Authority must prepare and submit a report on the TIF district on or before August 1 of each year. The Authority must also annually publish in a newspaper of general circulation in the City an annual statement for each tax increment financing district. The reporting and disclosure requirements outlined in this section begin with the year the district was certified, and shall end in the year in which both the district has been decertified and all tax increments have been spent or returned to the county for redistribution. Failure to meet these requirements, as determined by the State Auditors Office, may result in suspension of distribution of tax increment. SECTION 3.06 BUSINESS SUBSIDY COMPLIANCE The Project is exempt from the business subsidy requirements specified in Minnesota Statutes, Sections 116J.993 to 116J.995 because the intended assistance for the Project specified in this document is anticipated to be 100% for housing assistance. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 8 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 Exhibit I City of Monticello Tax Increment Financing District No. 1-42 Present Value Analysis 3 Section 469.175(3)(2) of the TIF Act Headwaters Apartment Project 1 Estimated Future Market Value w/ Tax Increment Financing $16,786,522 2 Payable 2021 Market Value $71,932 3 Market Value Increase (1-2) $16,714,590 4 Present Value of Future Tax Increments $2,928,146 5 Market Value Increase Less PV of Tax Increments $13,786,444 6 Estimated Future Market Value w/o Tax Increment Financing $92,248 7 Payable 2021 Market Value $71,932 8 Market Value Increase (6-7) $20,316 9 Increase in MV From TIF $13,766,128 2 ' Assume 1.00% annual appreciation over 26 year life of district. 2 Statutory compliance achieved if increase in market value from TIF (Line 9) is greater than or equal to zero. 3 Section 469.175(3)(2) of the TIF Act does not require this present value analysis for a housing tax increment financing district. This analysis is provided for information purposes. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 9 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 Exhibit II City of Monticello Monticello Tax Increment Financing District No. 1-42 (Housing) Headwaters Apartment Project Projected Tax Increment Cash Flow DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 10 Less Taxable Present TIF Taxes Original Captured Original Less Market Net Tax Captured Available Value of District Payable Value Capacity Net Tax Net Tax Tax Rate TIF State TIF e Available Year Year Capacity Capacity a z Fee s (TMV)' a TIF 1 2025 13,089,600 163,620 899 162,721 95.949% 156,129 (562) 155,567 142,630 2 2026 13,220,496 165,256 899 164,357 95.949% 157,699 (568) 157,131 282,468 3 2027 13,352,701 166,909 899 166,010 95.949% 159,285 (573) 158,712 419,568 4 2028 13,486,228 168,578 899 167,679 95.949% 160,886 (579) 160,307 553,983 5 2029 13,621,090 170,264 899 169,364 95.949% 162,504 (585) 161,919 685,767 6 2030 13,757,301 171,966 899 171,067 95.949% 164,137 (591) 163,546 814,970 7 2031 13,894,874 173,686 899 172,787 95.949% 165,787 (597) 165,190 941,644 8 2032 14,033,823 175,423 899 174,524 95.949% 167,454 (603) 166,851 1,065,837 9 2033 14,174,161 177,177 899 176,278 95.949% 169,137 (609) 168,528 1,187,598 10 2034 14,315,903 178,949 899 178,050 95.949% 170,837 (615) 170,222 1,306,975 11 2035 14,459,062 180,738 899 179,839 95.949% 172,554 (621) 171,933 1,424,014 12 2036 14,603,652 182,546 899 181,647 95.949% 174,288 (627) 173,661 1,538,761 13 2037 14,749,689 184,371 899 183,472 95.949% 176,040 (634) 175,406 1,651,262 14 2038 14,897,186 186,215 899 185,316 95.949% 177,809 (640) 177,169 1,761,559 15 2039 15,046,158 188,077 899 187,178 95.949% 179,595 (647) 178,948 1,869,695 16 2040 15,196,619 189,958 899 189,059 95.949% 181,400 (653) 180,747 1,975,714 17 2041 15,348,585 191,857 899 190,958 95.949% 183,222 (660) 182,562 2,079,656 18 2042 15,502,071 193,776 899 192,877 95.949% 185,063 (666) 184,397 2,181,563 19 2043 15,657,092 195,714 899 194,815 95.949% 186,923 (673) 186,250 2,281,473 20 2044 15,813,663 197,671 899 196,772 95.949% 188,800 (680) 188,120 2,379,427 21 2045 15,971,800 199,647 899 198,748 95.949% 190,697 (687) 190,010 2,475,462 22 2046 16,131,518 201,644 899 200,745 95.949% 192,613 (693) 191,920 2,569,616 23 2047 16,292,833 203,660 899 202,761 95.949% 194,547 (700) 193,847 2,661,925 24 2048 16,455,761 205,697 899 204,798 95.949% 196,502 (707) 195,795 2,752,427 25 2049 16,620,319 207,754 899 206,855 95.949% 198,475 (715) 197,760 2,841,155 26 2050 16,786,522 209,832 899 208,932 95.949% 200,469 (722)1 199,747 2,928,146 4,612,852 (16,606) 4,596,246 2,928,146 TOTAL = Key Assumptions for Cash Flow: 1 Taxable market value (TMV) annual growth assumption = 1.00% 2 Original Tax Rate estimated based on Taxes Payable Year 2021. 3 Election for captured tax capacity is 100.0% 4 Original Net Tax Capacity is calculated based on a TMV = $71,932, NTC calculated for Apartment classification. 5 Present value is calculated based on semi-annual payments, 3.0% rate, and date of 12/1/2022. 6 Available TIF is after deducting State Auditor Fee of 0.36%. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 10 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 Exhibit III City of Monticello Monticello Tax Increment Financing District No. 1-42 Impact on Other Taxing Jurisdictions (Taxes Payable 2021) Headwaters Apartment Project Annual Tax Increment Estimated Annual Captured Tax Capacity (Full Development) $187,178 Payable 2021 Local Tax Rate 95.949% Estimated Annual Tax Increment $179,595 Percent of Tax Base Net Tax Captured Percent of Capacity (NTC) Tax Capacity Total NTC City of Monticello Wright County ISD # 882 31,796,124 191,418,817 42,943,725 187,178 187,178 187,178 0.59% 0.10% 0.44% Dollar Impact of Affected Taxing Jurisdictions Net Tax Tax Added Local Capacity % of Total Increment Tax Rate (NTC) Share City of Monticello 35.659% 37.165% 66,746 0.210% Wright County 43.719% 45.565% 81,832 0.043% ISD # 882 15.390% 16.040% 28,807 0.067% Other 1.181% 1.231% 2,211 Totals 95.949% 100.000% 179,596 NOTE NO. 1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City does not create the Tax Increment District, the creation of the District will reduce tax capacities and increase the local tax rate as illustrated in the above tables. NOTE NO. 2: Assuming that NONE of the captured tax capacity would be available to the taxing jurisdiction if the City did not create the Tax Increment District, then the plan has virtually no initial effect on the tax capacities of the taxing jurisdictions. However, once the District is established, allowable costs paid from the increments, and the District is terminated, all taxing jurisdictions will experience an increase in their tax base. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 11 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 Exhibit IV City of Monticello Tax Increment Financing (Housing) District No. 1-42 Headwaters Apartment Project Estimated Tax Increments Over Maximum Life of District Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 12 Based on Pay 2021 Tax Rate = 95.949% 35.659% 43.719% 15.390% 7.787% New Estimated City County School Other TIF Taxes Taxable New Base Captured Total TIF TIF TIF TIF District Payable Market Tax Tax Tax Tax Related Related Related Related Year Year Value Capacity Capacity Capacity Increment Share Share Share Share 1 2025 13,089,600 163,620 899 162,721 156,129 58,025 71,140 25,043 1,921 2 2026 13,220,496 165,256 899 164,357 157,699 58,608 71,855 25,295 1,941 3 2027 13,352,701 166,909 899 166,010 159,285 59,197 72,578 25,549 1,961 4 2028 13,486,228 168,578 899 167,679 160,886 59,793 73,307 25,806 1,980 5 2029 13,621,090 170,264 899 169,364 162,504 60,394 74,044 26,065 2,001 6 2030 13,757,301 171,966 899 171,067 164,137 61,001 74,789 26,327 2,020 7 2031 13,894,874 173,686 899 172,787 165,787 61,614 75,541 26,592 2,040 8 2032 14,033,823 175,423 899 174,524 167,454 62,233 76,300 26,859 2,062 9 2033 14,174,161 177,177 899 176,278 169,137 62,859 77,067 27,129 2,082 10 2034 14,315,903 178,949 899 178,050 170,837 63,491 77,842 27,402 2,102 11 2035 14,459,062 180,738 899 179,839 172,554 64,129 78,624 27,677 2,124 12 2036 14,603,652 182,546 899 181,647 174,288 64,773 79,414 27,955 2,146 13 2037 14,749,689 184,371 899 183,472 176,040 65,424 80,212 28,236 2,168 14 2038 14,897,186 186,215 899 185,316 177,809 66,082 81,018 28,520 2,189 15 2039 15,046,158 188,077 899 187,178 179,595 66,746 81,832 28,807 2,210 16 2040 15,196,619 189,958 899 189,059 181,400 67,416 82,655 29,096 2,233 17 2041 15,348,585 191,857 899 190,958 183,222 68,094 83,485 29,388 2,255 18 2042 15,502,071 193,776 899 192,877 185,063 68,778 84,324 29,684 2,277 19 2043 15,657,092 195,714 899 194,815 186,923 69,469 85,171 29,982 2,301 20 2044 15,813,663 197,671 899 196,772 188,800 70,167 86,027 30,283 2,323 21 2045 15,971,800 199,647 899 198,748 190,697 70,872 86,891 30,587 2,347 22 2046 16,131,518 201,644 899 200,745 192,613 71,584 87,764 30,895 2,370 23 2047 16,292,833 203,660 899 202,761 194,547 72,303 88,645 31,205 2,394 24 2048 16,455,761 205,697 899 204,798 196,502 73,029 89,536 31,518 2,419 25 2049 16,620,319 207,754 899 206,855 198,475 73,762 90,435 31,835 2,443 26 2050 16,786,522 209,832 899 208,932 200,469 74,503 91,343 32,155 2,468 Total 4,612,852 1,714,346 2,101,839 739,890 56,777 Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 12 U M ro N c -I LL N N O Q O L a TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 EXHIBIT V Boundaries of Tax Increment Financing District No. 1-42 within Central Monticello Redevelopment Project No. I TIF District is inclusive of parcels within the TIF District and the adjacent roads and right of way DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 13 Sa TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-42 EXHIBIT VI Boundaries of Central Monticello Redevelopment Project No. I DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 14 Project Summary Headwaters Development, LLC is proposing a 168 unit senior 55+ community on the approximately 16.5 acre site located at the corner of Golf Course Road and Th Street West. The project will consist of 100 unit multifamily building and 30 twin home villas (60 units) — single story living. The project projects at least 40% of all units will be considered affordable based on 60% AMI levels for Wright County. The project took into consideration in its design, unit mix and rental rates, the housing study completed by the City of Monticello in 2020. kleadwaters Develor)ment, LLC 3 Application Addendum — Site Map with Boundaries i �r c t,•.r aa3c i CP 39 Gmq CtAyr,�t P"ad Oub vi>W Co,� Golf Course Road ' 1:3 Site Boundary Application Addendum — Proposed Watershed PROPOSED INFILTRATION BASINS SERVING P-1 \ PROPOSED WATERSHED EXHIBIT HEADWATERS DEVELOPMENT - MONTICELLO, MN PROPOSED INFILTRATION BASIN SERVING P-2 PROPOSED INFILTRATION BASIN SERVING P-3 AND OVERFLOW FROM P-2 BASIN waters v m 5 PROPOSED LAND USE DATA WATERSHED IMPERVIOUS PERVIOUS AREA MEA (AC) (AC) TOTAL MEA (AC) P•1 2.951 2.315 5.266 P-2 0.639 0.826 1.465 P-3 1.874 1.852 3.726 P-4 0.000 1.713 1.71 P-5 2.361 2.171 1.62 PROPOSED INFILTRATION BASINS SERVING P-1 \ PROPOSED WATERSHED EXHIBIT HEADWATERS DEVELOPMENT - MONTICELLO, MN PROPOSED INFILTRATION BASIN SERVING P-2 PROPOSED INFILTRATION BASIN SERVING P-3 AND OVERFLOW FROM P-2 BASIN waters v m 5 Application Addendum — General Description The project will be broken into two main projects (two separate lots); with the twin home site further divided into zero lot lines for each villa residential unit. All units are expected to be for rent, not for re -sale. Project 2 Project Size: $23.6 million Two Phase: 108 units total Type: Multi -family Parking: 75 on -grade; 100 covered . W w IOL 4• iVW Project 1 Project Size: $20.5 million Two Phase: 60 units total Type: single story villas Parking: 2 -car garages 1 I ■ ,'ie-a-dwate-r.s--Devel-ot).ment, LLC6 Application Addendum — Expected Calendar The Developer plans to roll-out the build in multiple phase in order to stagger the overall construction of each unit type. Below is the rough proposed timeline for each of the Phases: Alternate Phasing: to delay start of one TIF District a-ea-dwaters-DeveloQment, LLC Application Addendum — Statements Comprehensive Guide Plan • The parcel is currently zoned R-3 - Medium Density Residence District. The purpose of this district is to provide a range of housing choices and affordability through varying housing densities, types and designs including accessory dwelling units. Headwaters' proposed development meets the intent and required overall standards of the R-3 Zoning District through its blended multi -family apartment and twin -home patio style development featuring a total of 168 units. Our plan is to work with City staff and pursue our development approval through the City's PUD (Planned Unit Development) ordinance to allow for nuances in density in the specific portions of the proposal. Use of Assistance • The project will utilize public assistance to support the construction and operations of the senior community. The assistance will further support the project's ability to offer a minimum of 40% of its units to seniors meeting affordability requirements. Without the assistance, the project is not viable and will not be able to secure sufficient private funding (bank construction loans). Public Benefits • First and foremost, this project will be a part of solving the cities need for affordable senior housing. By providing this option to the residents of Monticello and surrounding communities, it allows those seniors to stay in a community they have been a part of for a long time. They are able to move into a more manageable residence, their existing homes turnover to the younger generation and ultimately supports future growth for the city. This project also expects to create more than $35 million of incremental property value on a site that has been owned by the city for a long time and has had essentially no market value. This project will allow the city to capture the value of the land over time, which it has been unable to do over the past several years. �e waters Develot)ment. LLC 13 Application Addendum — Development Team The developer represents one of the strongest senior housing teams in the country ■ The most important aspects of a senior housing development is ensuring the entire team has a deep understanding of the product and has substantial experience building and operating communities specifically designed for the senior population ■ The developer team has a long and successful track record of designing, developing and operating senior housing communities HEADWATERS -DEVELOPMENT- Development," Construction and Operations experts D E LTA MODULAR CONSTRUCTION JAYBIRD SENIOR LIVING 4eadwaters Develoament, LLC 14 Headwaters Development ■ Headwaters Development is a full service real estate development company dedicated exclusively to the senior housing segment ■ Our partners have substantial senior housing experience, including senior housing real estate development and operations, and over $4 billion of portfolio debt and equity transactions ■ Headwaters Development brings a depth of knowledge to the senior housing space unmatched by most generalist real estate developers in the market. It's our ability to seamlessly source project capital (both debt and equity), identify premiere locations for new project developments, execute construction management and provide operational oversight that sets us apart from our competition ■ Capital Markets: Ability to efficiently access both debt and equity providers to meet necessary capital requirements for each project ■ Market Feasibility: Analyzing markets to identify key supply and demand dynamics and demographics critical to locating the right market to initiate a new senior housing project ■ Construction Management: Coordination of development partners with a proven track record in senior housing. The development relationship plays a critical role in building the budget, creating the architectural design, obtaining appropriate permitting and licenses, and coordinating construction of the new community ■ Operations: Getting involved as early as possible to ensure the building design is optimal for the market being served and the expected level of acuity of the senior population. Coordinate community operations from fill -up through stabilization HEADWATED'c DEVELOPMENT- aters Develoo Award Winning Senior Living — Stonehaven ■ Voted best Senior Apartment in 2020 and 2021 ■ Developed by Headwaters Development, is a 97 unit senior living community offering the complete continuum of care, 78 independent living and assisted living units, 15 memory care units, and 4 rehabilitative care suites — Filled in 12 months ■ Amenities throughout the community, including a fitness center, beauty salon, library & game room, gourmet kitchen, club room, theater, arts & crafts room and a spiritual reflection room W VIC 11 :sem i.; . •� . 4 mow► �_� d 9� yl !�! ■R i 1 � N, .Muff - NP . -A / Award Winning Senior Living — Riley Crossing ■ Voted 2019 Business of the Year ■ Riley Crossing Senior Living is a Class A senior living community and Child Daycare center offering an Intergenerational experience that enhances the quality of life for both the seniors and the children ■ Developed by Headwaters Development, a 153 unit senior living community offering the complete continuum of care, 101 independent living and assisted living units, 28 memory care units, 8 rehabilitative care suites, and 16 twin homes — 45% pre -leased (Opened November 2019) — 100 student child daycare center d _ _ X91► `�`�- . MUM 1 Unmatched Quality — Willows Landing Senior Living ■ Developed by Headwaters Development, Willows Landing is a 93 unit senior living community offering the complete continuum of care, 78 independent living and assisted living units and 15 memory care units ■ Situated on the bluffs overlooking the beautiful Mississippi River valley. This community was specifically built to blend into the surrounding residential neighborhoods and the natural waterways of the Mississippi. ■ Amenities throughout the community, including a fitness center, beauty salon, library & game room, gourmet kitchen, club room, arts & crafts room and a spiritual reflection room ■ Opened December of 2020, nearly reached stabilization within the first year of operations iT. 1 *�i LI Sol A i � i i keadwaters Development, ILILC 18 City of Monticello Central Monticello Redevelopment Project No. 1 Establishment of Tax Increment Financing District No. 1-42 and Tax Increment Financing District No. 1-43 Housing TIF Districts Headwaters Apartment Project and Headwaters Villas Project Public Hearings on February 14 5 M T W T F 5 1 1 2 3 4 5 6 7 8 9 10 11 December 8 EDA request City Council call for hearing 12 13 14 15 16 17 18 19 20 21 22 23 24 25 December 13 City Council calls for public hearing 26 27 28 29 30 31 5 M T W T F 5 1 2 3 4 5 6 7 8 January 4 Last day for written notice to County Commissioner 9 10 11 12 13 14 15 January 14 Last day for notice and TIF pland and fiscal implications to County and School Distric 16 17 18 19 20 21 22 23 24 25 26 27 28 29 January 31 Last day to submit public hearing notice to newspaper, by 4pm 30 31 5 M T W T F 5 February 1 Planning Commission review 1 2 3 4 5 February 3 Public hearing notice published in the newspaper 6 7 8 9 10 11 12 13 14 15 16 17 18 19 February 14 Public hearing and establishment of TIF Districts 20 21 22 23 24 25 26 February 23 EDA approval of TIF Districts, subject to Council approval 27 28 5 M T W T F 5 1 2 3 4 5 6 7 8 9 10 11 12 On or after March 9 EDA approves TIF develoment agreements 13 14 15 16 17 18 19 March 15 Request certification by County 20 21 22 23 24 25 26 March 15 Submit plan to State 27 28 29 30 31 By June 30 Request certification by county auditor and submit plan to state Notes: 1 1 City Council regular meeting dates. 2 Economic Development Authority (EDA) regular meeting dates. 3 Planning Commission regular meeting dates. 4 City needs to confirm publication dates and is responsible for submitting notice to newspaper. NORTHLAND TIF for Housing �,to- PUBLIC FINANCE 2/9/2022 EDA Agenda: 02/23/22 6. Consideration of Adopting Resolution #2022-04 Authorizing Establishment of Affordable Housing Tax Increment Financing (TIF) District 1-43 (Headwaters Development 60 -unit Villas Project) within the Central Monticello Redevelopment Project No.1; and the adoption of the Tax Increment Financing Plan relating thereto (1T) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution #2022-04 approving the establishment of an Affordable Housing TIF District 1-43 (Headwaters Apartment Project) within the Central Monticello Redevelopment Project No. 1, and the adoption of the TIF Plan relating thereto. A TIF Application was received from Headwaters Development in November 2021. The developer is seeking public financial assistance for its proposal to construct 60 rental townhomes on 30 pad sites. The project is to be located on the easterly portion of a land parcel known as Outlot A, Country Club Manor, at the corner of Golf Course Road and 7th Street West within the City. The EDA has owned this 16.71 -acre property for some time. Due to the costs associated with the land acquisition and development of the villa housing units, the developer is seeking public financial assistance from the EDA in the form of pay -go tax increment financing and conveyance of the site to the developer from the EDA for $1.00. The tax increment revenue is proposed to come from a newly established Affordable Housing TIF District No. 1-43. Subject to approval of the request for public financial assistance, the developer plans to commence construction by May 15, 2022, and substantially complete construction by December 31, 2023. The total cost of the Project is estimated at approximately $20.5 million or $341,667 per unit which is based on the developer's current pro forma as of December 2021. The developer's request for public financial assistance is to assist with the extraordinary costs of development including grading, installation of utilities and streets and construction of the new housing. Headwaters Development has indicated that it will not proceed with the proposal without the approval of the requested public financial assistance. In a related sister proposal, Headwaters Development is also proposing to develop a 108 -unit apartment on the western portion of the EDA owned parcel. Due to slightly different developer ownership interests, the apartment development component will be presented as a separate TIF District (1-42) consideration. Both proposals are targeted to meet the needs of seniors (ages 55+) in the community. Relating to the TIF assistance, the developer has committed to creating and maintaining 40 percent of the units as affordable throughout the life of the TIF District. The last affordable housing TIF District (#1-40) was established in June 2018 for the 47 -unit Rivertown Residential Suites apartment which was developed by the Briggs Companies. It is in Block EDA Agenda: 02/23/22 36, in the core downtown area of Monticello and received a Certificate of Occupancy in May 2020 and a Certificate of Completion in the fall of 2020. State statutes for TIF review steps include a public hearing to be held by the City Council. That Public Hearing was held by the Council on February 14, 2022, followed by the adoption of a Resolution establishing TIF District 1-43 and approving the TIF Plan. In addition to the EDA also approving the TIF District and Plan, it will consider a Development Contract and Land Sale (Purchase and Development Contract) with Headwaters Development in April or early May 2022 pending receipt of land appraisal information and the outcome of final negotiations of the deal terms with the developer over the next 30 to 45 days. A timeline of the various TIF review and approval steps by the EDA and the City Council to date is shown below. ✓ November 29, 2021 - Receipt of the Headwaters Development TIF Application ✓ December 8, 2021— EDA reviews the TIF application and accepts it ✓ December 8, 2021— EDA Approves Resolution requesting the City Council to call for a Public Hearing for consideration of approving an Affordable Housing TIF District (1-43) ✓ December 13, 2021— City Council Approves Resolution calling for a February 14, 2022, Public Hearing wherein it allows public comment and discusses establishing TIF District 1-43 in support of Headwaters Development's Apartment proposal ✓ February 14, 2022 — City Council holds Public Hearing; Approves Resolution Establishing TIF District 1-43 and the TIF Plan relating thereto A TIF review and approval calendar is also attached to this report as Exhibit D. Al. STAFF IMPACT: Staff involved in the proposed TIF District consideration include the Community Development Director, Economic Development Manager, the EDA attorney and the financial advisor. No additional staff are needed to complete the TIF review and approval process. An estimate of the total hours involved in the TIF review and approval process to date by both in-house and consultant staff is between 70 to 75 hours. Additional hours will accrue to the effort through the date of certification with Wright County. A2. BUDGET IMPACT: The budgetary impact related to EDA consideration of its approval of TIF District 1-43 and the Plan relating thereto should be minimal. All consultant fees (legal and financial advisory) should be covered by Headwaters Development. The developer submitted the required TIF application fee of $10,000 in late November with the packet of materials. Costs incurred above and beyond that amount will be invoiced to the developer. The impact of the proposed development project offers a positive element in that the EDA has an opportunity to sell a parcel of land for a market rate price using the mechanics of the pay -go TIF District increment capture. Over time, the captured increment will flow into the Ua EDA Agenda: 02/23/22 EDA General Fund for the negotiated price of the 16.71 -acre parcel which will allow it to pursue other worthwhile housing and industrial development projects in the future. Also, Headwaters is not requesting a waiver of standard fees such as SAC, WAC, Trunk Fees, Park Dedication, etc. Ultimately, TIF increments are derived from new tax revenue from "new development" valuation. A3. COMPREHENSIVE PLAN IMPACT: The Vision adopted as part of the Monticello 2040 Plan is to create a friendly and safe community which is inclusive and fosters a sense of belonging. The city has adopted a strategy for housing which includes developing a range of housing choice and opportunity. As residents move through their career paths and family status, their housing needs change. As an actively developing community, Monticello seeks to provide opportunities for a full range of "life cycle" housing options allowing them to stay and grow with our community. This proposal meets a specific housing need in the community, which is further supported by the 2020 Housing Study. The proposed project also meets the Monticello 2040 goal for growing from within, as it is also located within the city on an underutilized parcel of land. A. ALTERNATIVE ACTIONS: 1. Motion to adopt Resolution #2020-04 authorizing establishment of Tax Increment Financing District 1-43 and adopting a Tax Increment Financing Plan therefor related to the Headwaters Development rental apartment proposal. 2. Motion to table consideration of Resolution #2020-04 for further research and/or discussion. B. STAFF RECOMMENDATION: Staff recommends the EDA adopt Resolution #2022-04 establishing the Affordable Housing TIF District (1-43) supporting the Headwaters Development senior apartment proposal and approving the TIF Plan relating thereto. The developer has indicated that it will not move forward with the proposal unless it can secure TIF assistance to help offset the extraordinary costs related to the parking structure and overall development components including grading, utility extensions and site excavation. The developer is proposing to develop rental units aimed at filling the market demand for seniors (ages 55+). C. SUPPORTING DATA: A. Resolution #2022-04 B. TIF #1-43 Plan EDA Agenda: 02/23/22 Summary - Headwaters Development 7th St. West Housing Proposal TIF #1-43 Review and Approval Calendar CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-04 RESOLUTION APPROVING THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-43 AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. BE IT RESOLVED By the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Board proposes to establish Tax Increment Financing District No. 1-43 (Headwaters Villa Project) (the "TIF District") within Central Monticello Redevelopment Project No. 1 (the "Project") and adopt a Tax Increment Financing Plan for the TIF District (the "TIF Plan"), pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, as amended, and Sections 469.174 to 469.1794, as amended (collectively, the "Act"). 1.02. Authority staff and consultants have prepared the TIF Plan for consideration by the Board and by the City of Monticello (the "City"). 1.03. Following approval of the TIF Plan by the City after a duly noticed public hearing, the Authority and the City will have performed all actions required by law to be performed prior to the establishment of the TIF District and the adoption and approval of the proposed TIF Plan, including, but not limited to, notification of the commissioner of Wright County, Minnesota ("Wright County") representing the area included in the TIF District, notification of Wright County and Independent School District No. 882, and approval of the TIF Plan by the City's planning commission. Section 2. Approval of TIF District No. 1-43 and TIF Plan; Further Actions. 2.01. The Board hereby finds that the TIF District is 2.a "housing district" within the meaning of Minnesota Statutes, Section 469.174, Subdivision 11, because it consists of a project or portions of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in Chapter 462A, Title II of the National Housing Act of 1934; the National Housing Act of 1959; the United States Housing Act of 1937, as amended; Title V of the Housing Act of 1949, as amended; and any other similar present or future federal, state or municipal legislation or the regulations promulgated under any of those acts. No more than 20% of the square footage of buildings that receive assistance from tax increments will consist of commercial, retail or other nonresidential uses. 2.02. The Authority hereby finds that the TIF District is in the public interest, and finds that the TIF Plan conforms in all respects to the requirements of the Act and that the establishment of the TIF District and adoption of the TIF Plan will help provide increased housing opportunities in the City, and thereby serves a public purpose. 2.03. The Authority further finds that the TIF Plan will afford maximum opportunity, consistent with the sound needs for the City as a whole, for the redevelopment or development of the Project by private enterprise in that the intent is to provide only that public assistance necessary to make the private development financially feasible. 526348v1 MNI MN190-156 2.04. The Authority hereby approves the TIF Plan for the TIF District, subject to approval thereof by the City Council following its public hearing thereon. 2.05. Subject to approval of the TIF Plan and establishment of the TIF District by the City Council, Authority staff and consultants are authorized and directed to proceed with the implementation of the TIF Plan 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 TIF Plan does not constitute approval of any project or a development agreement with any developer. Adopted by the Board of Commissioners of the City of Monticello Economic Development Authority this 23' day of February, 2022. President ATTEST: Executive Director 2 526348v1 MNI MN190-156 DRAFT CITY OF MONTICELLO, MINNESOTA TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 (HEADWATERS VILLAS PROJECT) CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 PROPOSED TO BE ADOPTED BY CITY OF MONTICELLO AND CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (EDA) PUBLIC HEARING DATE: , 2022 PLAN APPROVED BY EDA DATE: , 2022 PLAN APPROVED BY CITY COUNCIL DATE: , 2022 PLAN CERTIFICATION REQUEST DATE: , 2022 PLAN CERTIFIED DATE: , 2022 NORTHLAND y SECURITIES Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, MN 55402 (800)851-2920 Member NASD and SIPC Registered with SEC and MSRB TABLE OF CONTENTS ARTICLE I - INTRODUCTION AND DEFINITIONS.........................................................1 Section 1.01 Introduction......................................................................................1 Section 1.02 Definitions.........................................................................................1 Section 1.03 Plan Preparation...............................................................................1 ARTICLE II - TAX INCREMENT FINANCING PLAN.........................................................2 Section 2.01 Statutory Authority..........................................................................2 Section 2.02 Planned Development.....................................................................2 2.02.1 Project Description......................................................................................3 2.02.2 City Plans and Development Program .................................................... 3 2.02.3 Land Acquisition.........................................................................................3 2.02.4 Development Activities..............................................................................2 2.02.5 Need for Tax Increment Financing........................................................... 2 Section 2.03 Tax Increment Financing District...................................................3 2.03.1 Designation.................................................................................................. 3 2.03.2 Boundaries of TIF District..........................................................................3 2.03.3 Type of District............................................................................................3 Section 2.04 Plan for Use of Tax Increment........................................................3 2.04.1 Estimated Tax Increment............................................................................3 2.04.2 Project Costs.................................................................................................4 2.04.3 Estimated Sources and Uses of Funds.....................................................5 Figure2-1......................................................................................................5 2.04.4 Administrative Expense.............................................................................5 2.04.5 County Road Costs.....................................................................................6 2.04.6 Bonded Indebtedness................................................................................. 6 2.04.7 Election of First Year of Increment and Duration of TIF District ......... 6 2.04.8 Estimated Impact on Other Taxing Jurisdictions...................................6 2.04.9 Prior Planned Improvements.................................................................... 7 ARTICLE III -ADMINISTERING THE TIF DISTRICT......................................................7 Section 3.01 Filing and Certification....................................................................7 Section 3.02 Modifications of the Tax Increment Financing Plan....................7 Section 3.03 4 -Year Knockdown Rule..................................................................8 Section 3.04 Pooling/5-Year Rule..........................................................................8 Section 3.05 Financial Reporting and Disclosure Requirements .....................8 Section 3.06 Business Subsidy Compliance........................................................8 EXHIBITS........................................................................................................................... 9 Exhibit I - Present Value Analysis............................................................................9 Exhibit II - Projected Tax Increment......................................................................10 Exhibit III - Impact on Other Taxing Jurisdictions..............................................11 Exhibit IV - Estimated Tax Increment Over Life of District...............................12 Exhibit V - Map of TIF District...............................................................................13 Exhibit VI - Map of Central Monticello Redevelopment Project No. 1 ............14 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 ARTICLE I — INTRODUCTION AND DEFINITIONS SECTION 1.01 INTRODUCTION The City of Monticello and the City of Monticello Economic Development Authority propose to provide tax increment financing assistance through the establishment of Tax Increment Financing (Housing) District No. 1-43 to assist with the financing of certain project costs for the construction of approximately 60 rental villa housing units, with an affordable component, by a private developer. This document contains the plan for achieving the objectives of the Central Monticello Redevelopment Project No. 1 through the establishment of Tax Increment Financing District No. 1-43. SECTION 1.02 DEFINITIONS For the purposes of this document, the terms below have the meanings given in this section, unless the context in which they are used indicates a different meaning: 1. "Authority" means the City of Monticello Economic Development Authority. 2. "City" means the City of Monticello, Minnesota. 3. "City Council" means the City Council of the City. 4. "County" means Wright County, Minnesota. 5. "Developer" means the private party undertaking construction of the Project within the TIF District, Headwater Development LLC. 6. "Public Development Costs" means the cost of the development activities that will or are expected to occur within the Project Area or the TIF District. 7. "Project" means the construction by the Developer of approximately 60 rental villa housing units for seniors with two car attached garages, to be located at the corner of Golf Course Road and 7th Street West within the City. 8. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project, as the same may, from time to time, be amended or supplemented. 9. "Redevelopment Project" means Central Monticello Redevelopment Project No. 1 of the Authority, as the same may, from time to time, be amended or supplemented. 10. "School District" means Independent School District No. 882 (Monticello Public Schools). 11. "State" means the State of Minnesota. 12. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, both inclusive. 13. "TIF District" means Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project). 14. "TIF Plan" means the tax increment financing plan for the TIF District (this document). SECTION 1.03 PLAN PREPARATION The document was prepared for the City and the Authority by Northland Securities, Inc. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 ARTICLE II - TAX INCREMENT FINANCING PLAN SECTION 2.01 STATUTORY AUTHORITY The TIF District and the TIF Plan are established under the authority of the TIF Act. SECTION 2.02 PLANNED DEVELOPMENT 2.02.1 Project Description The Project includes construction of approximately 60 rental villa housing units for seniors to be located at the corner of Golf Course Road and 7th Street West within the City. The proposed single story living units will include two bedrooms and two -car garages. The property where the Project will be built is currently vacant and owned by the Authority. 2.02.2 City Plans and Development Program In addition to achieving the objectives of the Redevelopment Plan, the Project is consistent with and works to achieve the development objectives of the City. The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of property. The proposed development plans for the Project in the TIF District have been reviewed by the Planning Commission and the City Council. 2.02.3 Land Acquisition The Authority owns the land within the TIF District. The Authority plans to sell/convey land to the Developer for the Project. 2.02.4 Development Activities As of the date of approval of this TIF Plan, there are no development activities proposed in this TIF Plan that are subject to contracts. 2.02.5 Need for Tax Increment Financing In various materials the Developer has demonstrated that the proposed use of tax increment financing is needed to offset the high construction costs of high-quality low- to moderate - income housing and associated infrastructure required to support the facility. Without the proposed assistance, these initial up -front costs would make it infeasible for the Developer to be able to charge the affordable rents required for low -to moderate -income residents. Thus, it is the opinion of the City and the Authority that the proposed development would not reasonably be expected to occur solely through private investment within the foreseeable future and that 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 the market value estimated to result from the proposed development after subtracting the present value of the estimated tax increments for the maximum duration of the TIF District permitted by the TIF Plan. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed as described above and is shown in Exhibit I. This analysis, which is not required by the TIF Act for approval of a housing district, indicates that the increase in estimated market value of the proposed development (less the present value of the estimated tax increments for the maximum duration permitted by the TIF Plan) exceeds the estimated market value of the site prior to the establishment of the TIF District. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 SECTION 2.03 TAX INCREMENT FINANCING DISTRICT 2.03.1 Designation This TIF District is designated Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project). 2.03.2 Boundaries of TIF District The boundaries of the TIF District are depicted in Exhibit V. The TIF District will include a portion of what is currently parcel 155-033-900-010, along with the adjacent roads and right-of- way. The property to be included within the TIF District is described as follows: • [A description of the property is being prepared and will be inserted here.] The property will need to be platted and a new parcel identification number assigned by the County prior to the certification of the TIF District. 2.03.3 Type of District The TIF District is designated as a "housing" district pursuant to Section 469.174, subdivision 11 of the TIF Act. For the designation, of a tax increment financing housing district, the Developer of the Project will need to commit to the following: 1. Satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. This requirement applies for the duration of the tax increment financing district. The Fiscal Year 2021 Area Median Family Income (AMI) for the County is $104,900. The developer will commit to provide (a) 40% or more of units for occupancy by persons at 60% or less of AMI (based on household size). These income thresholds may change over the life of the TIF District. 2. Provide that no more than 20% of the square footage of building to receive assistance from tax increments consist of commercial, retail, or other nonresidential uses. Revenue derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in Section 469.174, subdivision 11 of the TIF Act. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the Authority may be included in the cost of a housing project. 3. Failure to comply with these income limitations is subject to the enforcement provisions of Section 469.1771 of the TIF Act. SECTION 2.04 PLAN FOR USE OF TAX INCREMENT 2.04.1 Estimated Tax Increment The original net tax capacity of value of the TIF District will be set by the County upon request for certification. For the purposes of this Plan, the estimated original net tax capacity is $3,928. This amount is estimated based on the most recent published estimated market value of $386,137 for Parcel 155-033-900-010; with tax capacity value calculated for residential rental property and the assumption that 81.4% of the valuation of this existing parcel will be attributed to the new parcel that will be established for the Project and included in the TIF District. The total tax capacity value of the property for the first estimated year of tax increment (for taxes payable in 2025) is estimated to be $156,234. This amount is based on a total estimated market value of $12,498,750 with property classified as residential rental property. The estimated difference between the total tax capacity value after development completion (for taxes payable in 2025) and the original net tax capacity value is the captured tax capacity value ($152,307) for the creation of tax increment. The total local tax rate for taxes payable in 2021 is 95.949%. The TIF Plan assumes that this rate DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 will be set as the original local tax rate for the TIF District. At the time of the certification of the original net tax capacity for the TIF District, the county auditor shall certify the original local tax rate that applies to the TIF District. The original local tax rate is the sum of all the local tax rates, excluding that portion of the school rate attributable to the general education levy under Minnesota Statutes section 126C.13, that apply to a property in the TIF District. The local tax rate to be certified is the rate in effect for the same taxes payable year applicable to the tax capacity values certified as the TIF District's original tax capacity. The resulting tax capacity rate is the original local tax rate for the life of the TIF District. Under these assumptions, the estimated annual tax increment will be $146,137 in the first year of tax increment collection. The actual tax increment will vary according to the certified original tax capacity value and original tax rate, the actual property value produced by the proposed development and the changes in property value and State tax policy over the life of the district. It is the intent of the City and the Authority to retain 100% of the captured tax capacity value for the duration of the TIF district. Exhibit II contains the estimated tax increment over the life of the District. 2.04.2 Public Development Costs The Authority will use tax increment to pay Public Development Costs. The Authority anticipates the use of tax increment to pay administrative expenses for the TIF District and to reimburse the Authority and the Developer on a pay -go basis for Public Development Costs. A contract between the Authority and the Developer will define the means for verifying Public Development Costs to be incurred by the Developer that will be eligible for reimbursement from tax increments and the means of disbursing tax increments collected by the Authority to the Developer. The Authority may also use tax increments to pay financing costs. The interest rate payable on bonds, the definition of bonds includes tax increment financing revenue notes, to be issued will be set pursuant to a contract with the Developer. The City and the Authority reserve the right to modify the TIF Plan to provide authority to expend tax increment from the TIF District on other qualified housing projects that meet the criteria for establishing a housing TIF district. Section 469.174, subdivision 11 of the TIF Act defines a housing district as consisting of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income. The requirements for the establishment of a housing TIF district are contained in Section 469.1761 of the TIF Act. The primary criteria are income related. The criteria are different for owned and rental housing. The practical application of this authority includes: • The use of tax increment is not limited by pooling restrictions or the five-year rule. • The tax increment can be spent on activities outside of the TIF district, but within the Development District No. 1. • This authority does not extend the maximum statutory duration of the TIF district. • The tax increment must be used solely to finance the cost of the "housing project" as defined by the TIF Act. The cost of public improvements directly related to the housing project and the allocated administrative expenses of the Authority may be included in the cost of the housing project. • No more than 20% of the square footage of buildings that receive TIF assistance may consist of commercial, retail, or other nonresidential uses. Potential applications of this authority include: • Individual housing projects avoiding the need for a new TIF district. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 4 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 • Supplementing the revenues of another housing TIF district. • Assistance for the renovation of existing housing. • Acquisition of land for housing. • Assistance to make public improvements more affordable. 2.04.3 Estimated Sources and Uses of Funds The estimated sources of revenue, along with the estimated Public Development Costs of the TIF District, are itemized in Figure 2-1 that follows. Such costs are eligible for reimbursement from tax increments from the TIF District. The City and Authority reserve the right to administratively adjust the amount of any of the Estimated Tax Increment Project Cost line items listed in Figure 2-1, so long as the total Estimated Tax Increment Project Costs amount, not including financing costs, is not increased. FIGURE 2-1 ESTIMATED SOURCES AND USES OF FUNDS Estimated Project/Financing Costs (to be paid or financed with tax increment) Total Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the County 5,733,000 Interest and investment earnings 60,000 Sales/lease proceeds - Market value homestead credit - Total Estimated Tax Increment Revenues 5,793,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition 1,680,670 Site improvements/preparation costs Utilities - Other public improvements - Construction of affordable housing 2,069,330 Small city authorized costs, if not already included above - Administrative costs 100,000 Estimated Tax Increment Project Costs 3,850,000 Estimated financing costs Interest expense 1,943,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment 5,793,000 Estimated Financing Total amount of bonds to be issued 2.04.4 Administrative Expense 5,793,000 The Authority reserves the right to spend up to ten percent (10%) of tax increment revenues distributed from the County on qualified administrative expenses pursuant to the requirements in the TIF Act. The Authority will use these monies to pay for and reimburse the Authority for costs of administering the TIF district allowed by the TIF Act. The estimated amount of tax DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 5 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 increment revenue planned to pay administrative expense is shown in Figure 2-1. Anticipated administrative expenses of the TIF District include annual audit of the fund for TIF District, preparation of annual reporting, legal publication of annual report, and administration of the development agreement, among other qualified purposes. 2.04.5 County Road Costs The proposed development will not substantially increase the use of county roads and necessitate the need to use tax increments to pay for county road improvements. 2.04.6 Bonded Indebtedness The total amount of bonds estimated to be issued is shown in Figure 2-1. The City will not issue any general obligation bonded indebtedness as a result of the TIF Plan. The Authority intends to use tax increment financing to reimburse the Developer on pay-as- you-go basis for Public Development Costs pursuant to a contract with the Developer. The City or the Authority may advance or loan money to finance expenditures under Section 469.176, subdivision 4 of the TIF Act, from the general funds of the City or the Authority or any other fund under which there is legal authority to do so, subject to the following provisions: (a) Not later than 60 days after money is transferred, advanced, or spent, whichever is earliest, the loan or advance must be authorized by resolution of the City or of the Authority, whichever has jurisdiction over the fund from which the advance or loan is authorized. (b) The resolution may generally grant to the City or the Authority the power to make interfund loans under one or more tax increment financing plans or for one or more districts. The resolution may be adopted before or after the adoption of the tax increment financing plan or the creation of the tax increment financing district from which the advance or loan is to be repaid. (c) The terms and conditions for repayment of the loan must be provided in writing. The written terms and conditions may be in any form, but must include, at a minimum, the principal amount, the interest rate, and maximum term. Written terms may be modified or amended in writing by the City or the Authority before the latest decertification of any tax increment financing district from which the interfund loan is to be repaid. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or 549.09 are from time to time adjusted. Loans or advances may be structured as draw- down or line -of -credit obligations of the lending fund. (d) The Authority shall report in the annual report submitted under Section 469.175, subdivision 6 of the TIF Act: (1) the amount of any interfund loan or advance made in a calendar year; and (2) any amendment of an interfund loan or advance made in a calendar year. 2.04.7 Election of First Year of Increment and Duration of TIF District The duration to collect and spend tax increments on eligible purposes is set at the maximum duration of 25 years after the date of receipt of the first tax increment or 26 years of tax increment collection. The first year of increment is elected to be year 2025. Based on the elected first year of increment, the estimated decertification date is 12/31/2050. 2.04.8 Estimated Impact on Other Taxing Jurisdictions Exhibits III and IV show the estimated impact on other taxing jurisdictions if the maximum DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 6 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 estimated retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City and the Authority believe that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The City and the Authority anticipate minimal impact of the proposed development on city -provided services. A manageable increase in water and sewer usage is expected. It is anticipated that there may be a slight but manageable increase in police and fire protection duties due to the development. 2.04.9 Prior Planned Improvements There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. The Authority will include this statement with the request for certification to the County Auditor. ARTICLE III —ADMINISTERING THE TIF DISTRICT SECTION 3.01 FILING AND CERTIFICATION The filing and certification of the TIF Plan consists of the following steps: 1. Upon adoption of the TIF Plan by the City and the Authority, the Authority shall submit a copy of the TIF Plan to the Minnesota Department of Revenue and the Office of the State Auditor. 2. The Authority shall request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. SECTION 3.02 MODIFICATIONS OF THE TAX INCREMENT FINANCING PLAN The City and the Authority reserve the right to modify the TIF District and the TIF Plan. Under the TIF Act, the following actions can only be approved after satisfying all the necessary requirements for approval of the original TIF Plan (including notifications and public hearing): 1. any reduction or enlargement of geographic area of the Project or TIF District that does not meet the requirements of Section 469.175, subdivision 4, paragraph (e) of the TIF Act. 2. increase in amount of bonded indebtedness to be incurred; 3. a determination to capitalize interest on the debt if that determination was not a part of the original plan; 4. increase in the portion of the captured net tax capacity to be retained by the Authority; 5. increase in the estimate of the cost of the Project, including administrative expenses, that will be paid or financed with tax increment from the TIF District; or 6. designation of additional property to be acquired by the Authority. Other modifications can be made by resolution of the Authority. In addition, the original approval process does not apply if (1) the only modification is elimination of parcels from the TIF District and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City and the DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 7 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 Authority agree that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. Upon approval by the City, the Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. SECTION 3.03 4 -YEAR KNOCKDOWN RULE Since the TIF District is anticipated to consist of a single parcel, development of the Project as planned prevents any loss of value from the 4 -Year Knockdown Rule. The 4 -Year Knockdown Rule requires that if after four years from certification of the TIF District no demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the City, Authority, or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. SECTION 3.04 POOLING/5-YEAR RULE As permitted under Section 469.1763, subdivision 2(b) and subdivision 3(a)(5) of the TIF Act, any expenditures of increment from the TIF District to pay the cost of a "housing project" as defined in Section 469.174, subdivision 11 of the TIF Act will be treated as an expenditure within the district for the purposes of the "pooling rules" and the "five year rule". It is not anticipated that tax increments will be spent outside the TIF District (except allowable administrative expenses), but such expenditures are expressly authorized in the TIF Plan. SECTION 3.05 FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS The Authority will comply with the annual reporting requirements of the TIF Act pursuant to the guidelines of the Office of the State Auditor. Under current law, the Authority must prepare and submit a report on the TIF district on or before August 1 of each year. The Authority must also annually publish in a newspaper of general circulation in the City an annual statement for each tax increment financing district. The reporting and disclosure requirements outlined in this section begin with the year the district was certified, and shall end in the year in which both the district has been decertified and all tax increments have been spent or returned to the county for redistribution. Failure to meet these requirements, as determined by the State Auditors Office, may result in suspension of distribution of tax increment. SECTION 3.06 BUSINESS SUBSIDY COMPLIANCE The Project is exempt from the business subsidy requirements specified in Minnesota Statutes, Sections 116J.993 to 116J.995 because the intended assistance for the Project specified in this document is anticipated to be 100% for housing assistance. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 8 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 Exhibit I City of Monticello Tax Increment Financing District No. 1-43 Present Value Analysis 3 Section 469.175(3)(2) of the TIF Act Headwaters Villas Project 1 Estimated Future Market Value w/ Tax Increment Financing 21,371,729 ' 2 Payable 2021 Market Value 314,205 3 Market Value Increase (1-2) 21,057,524 4 Present Value of Future Tax Increments 3,637,507 5 Market Value Increase Less PV of Tax Increments 17,420,017 6 Estimated Future Market Value w/o Tax Increment Financing 402,947 ' 7 Payable 2021 Market Value 314,205 8 Market Value Increase (6-7) 88,742 9 Increase in MV From TIF 17,331,275 Z ' Assume 1.00% annual appreciation over 26 year life of district. Z Statutory compliance achieved if increase in market value from TIF (Line 9) is greater than or equal to zero. 3 Section 469.175(3)(2) of the TIF Act does not require this present value analysis for a housing tax increment financing district. This analysis is provided for information purposes. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 9 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 Exhibit II City of Monticello Monticello Tax Increment Financing District No. 1-43 (Housing) Headwaters Villas Project Projected Tax Increment Cash Flow DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 10 Less Taxable Present TIF Taxes Original Captured Original Less Market Net Tax Captured Available Value of District Payable Net Tax Net Tax Tax Rate State Year Year Value Capacity Capacity Capacity a z TIF Fee TIF Available (TMV)' a TIF s 1 2025 12,498,750 156,234 3,928 152,307 95.949% 146,137 (526) 145,611 133,502 2 2026 16,831,650 210,396 3,928 206,468 95.949% 198,104 (713) 197,391 309,168 3 2027 16,999,967 212,500 3,928 208,572 95.949% 200,123 (720) 199,403 481,418 4 2028 17,169,966 214,625 3,928 210,697 95.949% 202,162 (728) 201,434 650,319 5 2029 17,341,666 216,771 3,928 212,843 95.949% 204,221 (735) 203,486 815,934 6 2030 17,515,082 218,939 3,928 215,011 95.949% 206,301 (743) 205,558 978,327 7 2031 17,690,233 221,128 3,928 217,200 95.949% 208,402 (750) 207,652 1,137,561 8 2032 17,867,136 223,339 3,928 219,412 95.949% 210,523 (758) 209,765 1,293,697 9 2033 18,045,807 225,573 3,928 221,645 95.949% 212,666 (766) 211,900 1,446,794 10 2034 18,226,265 227,828 3,928 223,901 95.949% 214,831 (773) 214,058 1,596,913 11 2035 18,408,528 230,107 3,928 226,179 95.949% 217,017 (781) 216,236 1,744,111 12 2036 18,592,613 232,408 3,928 228,480 95.949% 219,224 (789) 218,435 1,888,443 13 2037 18,778,539 234,732 3,928 230,804 95.949% 221,454 (797) 220,657 2,029,965 14 2038 18,966,325 237,079 3,928 233,151 95.949% 223,707 (805) 222,902 2,168,733 15 2039 19,155,988 239,450 3,928 235,522 95.949% 225,981 (814) 225,167 2,304,799 16 2040 19,347,548 241,844 3,928 237,917 95.949% 228,279 (822) 227,457 2,438,217 17 2041 19,541,023 244,263 3,928 240,335 95.949% 230,599 (830) 229,769 2,569,036 18 2042 19,736,433 246,705 3,928 242,778 95.949% 232,943 (839) 232,104 2,697,308 19 2043 19,933,798 249,172 3,928 245,245 95.949% 235,310 (847) 234,463 2,823,081 20 2044 20,133,136 251,664 3,928 247,737 95.949% 237,701 (856) 236,845 2,946,406 21 2045 20,334,467 254,181 3,928 250,253 95.949% 240,116 (864) 239,252 3,067,328 22 2046 20,537,812 256,723 3,928 252,795 95.949% 242,554 (873) 241,681 3,185,894 23 2047 20,743,190 259,290 3,928 255,362 95.949% 245,018 (882) 244,136 3,302,151 24 2048 20,950,622 261,883 3,928 257,955 95.949% 247,505 (891) 246,614 3,416,143 25 2049 21,160,128 264,502 3,928 260,574 95.949% 250,018 (900) 249,118 3,527,914 26 2050 21,371,729 267,147 3,928 263,219 95.949% 252,556 (909)1 251,647 3,637,507 5,753,452 (20,712) 5,732,740 3,637,507 TOTAL = Key Assumptions for Cash Flow: 1 Taxable market value (TMV) annual growth assumption = 1.00% 2 Original Tax Rate estimated based on Taxes Payable Year 2021. 3 Election for captured tax capacity is 100.0% 4 Original Net Tax Capacity is calculated based on a TMV = $314,205, NTC calculated for Apartment classification. 5 Present value is calculated based on semi-annual payments, 3.0% rate, and date of 12/1/2022. 6 Available TIF is after deducting State Auditor Fee of 0.36%. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 10 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 Exhibit III City of Monticello Monticello Tax Increment Financing District No. 1-43 Impact on Other Taxing Jurisdictions (Taxes Payable 2021) Headwaters Villas Project Annual Tax Increment Estimated Annual Captured Tax Capacity (Full Development) $235,522 Payable 2021 Local Tax Rate 95.949% Estimated Annual Tax Increment $225,981 Percent of Tax Base Net Tax Captured Percent of Capacity (NTC) Tax Capacity Total NTC City of Monticello Wright County ISD # 882 31,796,124 191,418,817 42,943,725 235,522 235,522 235,522 0.74% 0.12% 0.55% Dollar Impact of Affected Taxing Jurisdictions Net Tax Tax Added Local Capacity % of Total Increment Tax Rate (NTC) Share City of Monticello 35.659% 37.165% 83,985 0.264% Wright County 43.719% 45.565% 102,968 0.054% ISD # 882 15.390% 16.040% 36,247 0.084% Other 1.181% 1.231% 2,782 Totals 95.949% 100.000% 225,982 NOTE NO. 1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City does not create the Tax Increment District, the creation of the District will reduce tax capacities and increase the local tax rate as illustrated in the above tables. NOTE NO. 2: Assuming that NONE of the captured tax capacity would be available to the taxing jurisdiction if the City did not create the Tax Increment District, then the plan has virtually no initial effect on the tax capacities of the taxing jurisdictions. However, once the District is established, allowable costs paid from the increments, and the District is terminated, all taxing jurisdictions will experience an increase in their tax base. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 11 TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 Exhibit IV City of Monticello Tax Increment Financing (Housing) District No. 1-43 Headwaters Villas Project Estimated Tax Increments Over Maximum Life of District Total 5,753,452 2,138,241 2,621,551 922,838 70,822 Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 12 Based on Pay 2021 Tax Rate = 95.949% 35.659% 43.719% 15.390% 1.181 New Estimated City County School Other TIF Taxes Taxable New Base Captured Total TIF TIF TIF TIF District Payable Market Tax Tax Tax Tax Related Related Related Related Year Year Value Capacity Capacity Capacity Increment Share Share Share Share 1 2025 12,498,750 156,234 3,928 152,307 146,137 54,311 66,587 23,440 1,799 2 2026 16,831,650 210,396 3,928 206,468 198,104 73,624 90,266 31,775 2,439 3 2027 16,999,967 212,500 3,928 208,572 200,123 74,375 91,186 32,099 2,463 4 2028 17,169,966 214,625 3,928 210,697 202,162 75,132 92,115 32,426 2,489 5 2029 17,341,666 216,771 3,928 212,843 204,221 75,898 93,053 32,757 2,513 6 2030 17,515,082 218,939 3,928 215,011 206,301 76,671 94,001 33,090 2,539 7 2031 17,690,233 221,128 3,928 217,200 208,402 77,451 94,958 33,427 2,566 8 2032 17,867,136 223,339 3,928 219,412 210,523 78,240 95,925 33,767 2,591 9 2033 18,045,807 225,573 3,928 221,645 212,666 79,036 96,901 34,111 2,618 10 2034 18,226,265 227,828 3,928 223,901 214,831 79,841 97,887 34,458 2,645 11 2035 18,408,528 230,107 3,928 226,179 217,017 80,653 98,883 34,809 2,672 12 2036 18,592,613 232,408 3,928 228,480 219,224 81,474 99,889 35,163 2,698 13 2037 18,778,539 234,732 3,928 230,804 221,454 82,302 100,905 35,521 2,726 14 2038 18,966,325 237,079 3,928 233,151 223,707 83,139 101,932 35,882 2,754 15 2039 19,155,988 239,450 3,928 235,522 225,981 83,985 102,968 36,247 2,781 16 2040 19,347,548 241,844 3,928 237,917 228,279 84,839 104,015 36,615 2,810 17 2041 19,541,023 244,263 3,928 240,335 230,599 85,701 105,072 36,988 2,838 18 2042 19,736,433 246,705 3,928 242,778 232,943 86,572 106,140 37,364 2,867 19 2043 19,933,798 249,172 3,928 245,245 235,310 87,452 107,219 37,743 2,896 20 2044 20,133,136 251,664 3,928 247,737 237,701 88,340 108,308 38,127 2,926 21 2045 20,334,467 254,181 3,928 250,253 240,116 89,238 109,408 38,514 2,956 22 2046 20,537,812 256,723 3,928 252,795 242,554 90,144 110,519 38,905 2,986 23 2047 20,743,190 259,290 3,928 255,362 245,018 91,060 111,642 39,300 3,016 24 2048 20,950,622 261,883 3,928 257,955 247,505 91,984 112,775 39,699 3,047 25 2049 21,160,128 264,502 3,928 260,574 250,018 92,918 113,920 40,102 3,078 26 2050 21,371,729 267,147 3,928 263,219 252,556 93,861 115,077 40,509 3,109 Total 5,753,452 2,138,241 2,621,551 922,838 70,822 Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 12 U M ro N c -I LL N N O Q O L a TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 EXHIBIT V Boundaries of Tax Increment Financing District No. 1-43 within Central Monticello Redevelopment Project No. I TIF District is inclusive of parcels within the TIF District and the adjacent roads and right of way DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 13 Sa TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-43 EXHIBIT VI Boundaries of Central Monticello Redevelopment Project No. I DRAFT FOR PUBLIC HEARING FEBRUARY 14, 2022 14 Project Summary Headwaters Development, LLC is proposing a 168 unit senior 55+ community on the approximately 16.5 acre site located at the corner of Golf Course Road and Th Street West. The project will consist of 100 unit multifamily building and 30 twin home villas (60 units) — single story living. The project projects at least 40% of all units will be considered affordable based on 60% AMI levels for Wright County. The project took into consideration in its design, unit mix and rental rates, the housing study completed by the City of Monticello in 2020. kleadwaters Develor)ment, LLC 3 Application Addendum — Site Map with Boundaries i �r c t,•.r aa3c i CP 39 Gmq CtAyr,�t P"ad Oub vi>W Co,� Golf Course Road ' 1:3 Site Boundary Application Addendum — Proposed Watershed PROPOSED INFILTRATION BASINS SERVING P-1 \ PROPOSED WATERSHED EXHIBIT HEADWATERS DEVELOPMENT - MONTICELLO, MN PROPOSED INFILTRATION BASIN SERVING P-2 PROPOSED INFILTRATION BASIN SERVING P-3 AND OVERFLOW FROM P-2 BASIN waters v m 5 PROPOSED LAND USE DATA WATERSHED IMPERVIOUS PERVIOUS AREA MEA (AC) (AC) TOTAL MEA (AC) P•1 2.951 2.315 5.266 P-2 0.639 0.826 1.465 P-3 1.874 1.852 3.726 P-4 0.000 1.713 1.71 P-5 2.361 2.171 1.62 PROPOSED INFILTRATION BASINS SERVING P-1 \ PROPOSED WATERSHED EXHIBIT HEADWATERS DEVELOPMENT - MONTICELLO, MN PROPOSED INFILTRATION BASIN SERVING P-2 PROPOSED INFILTRATION BASIN SERVING P-3 AND OVERFLOW FROM P-2 BASIN waters v m 5 Application Addendum — General Description The project will be broken into two main projects (two separate lots); with the twin home site further divided into zero lot lines for each villa residential unit. All units are expected to be for rent, not for re -sale. Project 2 Project Size: $23.6 million Two Phase: 108 units total Type: Multi -family Parking: 75 on -grade; 100 covered . W w IOL 4• iVW Project 1 Project Size: $20.5 million Two Phase: 60 units total Type: single story villas Parking: 2 -car garages 1 I ■ ,'ie-a-dwate-r.s--Devel-ot).ment, LLC6 Application Addendum — Expected Calendar The Developer plans to roll-out the build in multiple phase in order to stagger the overall construction of each unit type. Below is the rough proposed timeline for each of the Phases: Alternate Phasing: to delay start of one TIF District a-ea-dwaters-DeveloQment, LLC Application Addendum — Statements Comprehensive Guide Plan • The parcel is currently zoned R-3 - Medium Density Residence District. The purpose of this district is to provide a range of housing choices and affordability through varying housing densities, types and designs including accessory dwelling units. Headwaters' proposed development meets the intent and required overall standards of the R-3 Zoning District through its blended multi -family apartment and twin -home patio style development featuring a total of 168 units. Our plan is to work with City staff and pursue our development approval through the City's PUD (Planned Unit Development) ordinance to allow for nuances in density in the specific portions of the proposal. Use of Assistance • The project will utilize public assistance to support the construction and operations of the senior community. The assistance will further support the project's ability to offer a minimum of 40% of its units to seniors meeting affordability requirements. Without the assistance, the project is not viable and will not be able to secure sufficient private funding (bank construction loans). Public Benefits • First and foremost, this project will be a part of solving the cities need for affordable senior housing. By providing this option to the residents of Monticello and surrounding communities, it allows those seniors to stay in a community they have been a part of for a long time. They are able to move into a more manageable residence, their existing homes turnover to the younger generation and ultimately supports future growth for the city. This project also expects to create more than $35 million of incremental property value on a site that has been owned by the city for a long time and has had essentially no market value. This project will allow the city to capture the value of the land over time, which it has been unable to do over the past several years. �e waters Develot)ment. LLC 13 Application Addendum — Development Team The developer represents one of the strongest senior housing teams in the country ■ The most important aspects of a senior housing development is ensuring the entire team has a deep understanding of the product and has substantial experience building and operating communities specifically designed for the senior population ■ The developer team has a long and successful track record of designing, developing and operating senior housing communities HEADWATERS -DEVELOPMENT- Development," Construction and Operations experts D E LTA MODULAR CONSTRUCTION JAYBIRD SENIOR LIVING 4eadwaters Develoament, LLC 14 Headwaters Development ■ Headwaters Development is a full service real estate development company dedicated exclusively to the senior housing segment ■ Our partners have substantial senior housing experience, including senior housing real estate development and operations, and over $4 billion of portfolio debt and equity transactions ■ Headwaters Development brings a depth of knowledge to the senior housing space unmatched by most generalist real estate developers in the market. It's our ability to seamlessly source project capital (both debt and equity), identify premiere locations for new project developments, execute construction management and provide operational oversight that sets us apart from our competition ■ Capital Markets: Ability to efficiently access both debt and equity providers to meet necessary capital requirements for each project ■ Market Feasibility: Analyzing markets to identify key supply and demand dynamics and demographics critical to locating the right market to initiate a new senior housing project ■ Construction Management: Coordination of development partners with a proven track record in senior housing. The development relationship plays a critical role in building the budget, creating the architectural design, obtaining appropriate permitting and licenses, and coordinating construction of the new community ■ Operations: Getting involved as early as possible to ensure the building design is optimal for the market being served and the expected level of acuity of the senior population. Coordinate community operations from fill -up through stabilization HEADWATED'c DEVELOPMENT- aters Develoo Award Winning Senior Living — Stonehaven ■ Voted best Senior Apartment in 2020 and 2021 ■ Developed by Headwaters Development, is a 97 unit senior living community offering the complete continuum of care, 78 independent living and assisted living units, 15 memory care units, and 4 rehabilitative care suites — Filled in 12 months ■ Amenities throughout the community, including a fitness center, beauty salon, library & game room, gourmet kitchen, club room, theater, arts & crafts room and a spiritual reflection room W VIC 11 :sem i.; . •� . 4 mow► �_� d 9� yl !�! ■R i 1 � N, .Muff - NP . -A / Award Winning Senior Living — Riley Crossing ■ Voted 2019 Business of the Year ■ Riley Crossing Senior Living is a Class A senior living community and Child Daycare center offering an Intergenerational experience that enhances the quality of life for both the seniors and the children ■ Developed by Headwaters Development, a 153 unit senior living community offering the complete continuum of care, 101 independent living and assisted living units, 28 memory care units, 8 rehabilitative care suites, and 16 twin homes — 45% pre -leased (Opened November 2019) — 100 student child daycare center d _ _ X91► `�`�- . MUM 1 Unmatched Quality — Willows Landing Senior Living ■ Developed by Headwaters Development, Willows Landing is a 93 unit senior living community offering the complete continuum of care, 78 independent living and assisted living units and 15 memory care units ■ Situated on the bluffs overlooking the beautiful Mississippi River valley. This community was specifically built to blend into the surrounding residential neighborhoods and the natural waterways of the Mississippi. ■ Amenities throughout the community, including a fitness center, beauty salon, library & game room, gourmet kitchen, club room, arts & crafts room and a spiritual reflection room ■ Opened December of 2020, nearly reached stabilization within the first year of operations iT. 1 *�i LI Sol A i � i i keadwaters Development, LL 18 City of Monticello Central Monticello Redevelopment Project No. 1 Establishment of Tax Increment Financing District No. 1-42 and Tax Increment Financing District No. 1-43 Housing TIF Districts Headwaters Apartment Project and Headwaters Villas Project Public Hearings on February 14 5 M T W T F 5 1 1 2 3 4 5 6 7 8 9 10 11 December 8 EDA request City Council call for hearing 12 13 14 15 16 17 18 19 20 21 22 23 24 25 December 13 City Council calls for public hearing 26 27 28 29 30 31 5 M T W T F 5 1 2 3 4 5 6 7 8 January 4 Last day for written notice to County Commissioner 9 10 11 12 13 14 15 January 14 Last day for notice and TIF pland and fiscal implications to County and School Distric 16 17 18 19 20 21 22 23 24 25 26 27 28 29 January 31 Last day to submit public hearing notice to newspaper, by 4pm 30 31 5 M T W T F 5 February 1 Planning Commission review 1 2 3 4 5 February 3 Public hearing notice published in the newspaper 6 7 8 9 10 11 12 13 14 15 16 17 18 19 February 14 Public hearing and establishment of TIF Districts 20 21 22 23 24 25 26 February 23 EDA approval of TIF Districts, subject to Council approval 27 28 5 M T W T F 5 1 2 3 4 5 6 7 8 9 10 11 12 On or after March 9 EDA approves TIF develoment agreements 13 14 15 16 17 18 19 March 15 Request certification by County 20 21 22 23 24 25 26 March 15 Submit plan to State 27 28 29 30 31 By June 30 Request certification by county auditor and submit plan to state Notes: 1 1 City Council regular meeting dates. 2 Economic Development Authority (EDA) regular meeting dates. 3 Planning Commission regular meeting dates. 4 City needs to confirm publication dates and is responsible for submitting notice to newspaper. NORTHLAND TIF for Housing �,to- PUBLIC FINANCE 2/9/2022 EDA Agenda: 02/23/22 7. Consideration of Adopting Resolution #2022-05 Requesting the City Council Call for a Public Hearing related to establishment of a Redevelopment Tax Increment Financing (TIF) District #1-45 in Connection with Deephaven Development -Buchholz Construction's Block 52 Redevelopment Proposal (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution #2022-05 requesting the City Council call for a public hearing related to the proposed establishment of a Redevelopment Tax Increment Financing (TIF) District (#1-45). The recent submittal of a TIF Application by Deephaven Development -Buchholz Construction is in connection with its proposal to pursue a mixed-use residential, commercial redevelopment in Block 52. In the TIF Application submitted by Deephaven-Buchholz, the attached proposal illustrations outline a vertical mixed-use development. The materials show a new L-shaped building in the eastern half of the block fronting along MN-TH#25 and Broadway with courtyard (center of the Block) parking for 114 vehicles. The building includes an underground parking garage with 83 stalls for use by the residents of an 87 -unit market rate apartment component. The main floor of the building contains 30,500 square feet of commercial and office space with excellent visibility from MN-TH#25 and Broadway. A main floor suite of approximately 10,500 square feet is designated as an office for an anchor tenant. Another main floor space of about 5,500 square feet on the northeast end of the building is denoted as restaurant. The Plans show the restaurant having a sizeable outdoor patio overlooking West Bridge Park. Floors 2 through 5 are designated as residential units. A clubhouse, lounge and rooftop patio for use by the apartment residents is shown on the 5t" floor with a bird's eye view of West Bridge Park and the Mississippi River. Approximately 80 percent of the residential units will have views of the public parks (East Bridge and West Bridge) and the Mississippi River. Deephaven-Buchholz estimates the total cost of the development at over $25,000,000. Various other components such as utility relocates, land acquisition and related costs and associated public infrastructure upgrades are not included in that figure. A rough estimate of the all -in costs, including land acquisition, excavation, utility extensions -relocates, parking structure, new construction, and associated public infrastructure improvements will increase the total to over $31,000,000. The developer is seeking TIF assistance to offset extraordinary development costs including excavation and the parking structure costs as well as utility extensions. They are asking the EDA to convey the site to them for $1.00. There are numerous redevelopment TIF review and approval steps that culminate in early June 2022 if all the action steps remain on schedule. A TIF review and approval calendar is attached to this report. Deephaven- Buchholz has indicated that they would like to obtain title to the property and begin excavation and construction activities by September -October of 2022. 1 EDA Agenda: 02/23/22 The hearing is requested for May 23rd, 2022 to allow time for continued evaluation and due diligence by all parties. Redevelopment of Block 52 has been the number one goal for the EDA for several years. The EDA directed that a Small Area Plan (SAP) focusing on the core downtown area be completed establishing guiding development goals and objectives. That was completed and adopted by the EDA and the City Council in late 2017. For Block 52, the SAP called for mixed- use redevelopment featuring housing, retail and entertainment as anchoring uses in the Block. The SAP also recommends Block 52 redevelopment proposals embrace and relate to the Mississippi River. It further encourages courtyard parking and enhanced public private connection features. The Deephaven-Buchholz redevelopment plan submittal aligns with many of those goals. Land use review and other public improvement and public space considerations will also be necessary for the proposed project. Al. STAFF IMPACT: The EDA attorney (Kennedy and Graven) and the Financial Advisor (Northland Securities) as well as the Economic Development Manager and the Community Development Director have been involved in the initial work tasks related to the Deephaven- Buchholz TIF Application submittal. It should be noted that if the EDA approves moving forward with the TIF assistance, a sizeable number of action steps and tasks lie ahead for the proposal. A TIF review and approval calendar is included illustrating the key milestones. A rough projection of the number of hours that will be allocated to all steps related to the proposal is approximately 165 to 185. A2. BUDGET IMPACT: The budgetary impact related to the task of initial consideration of requesting the City Council call for a public hearing regarding establishment of a Redevelopment TIF District 1-45 is minimal. A3. COMPREHENSIVE PLAN IMPACT: The Vision adopted as part of the Monticello 2040 Plan is to create a friendly and safe community which is inclusive and fosters a sense of belonging. The value statements call for a "Vibrant downtown that embraces the River and provides a focal point for the community". It also notes as a value "A range of attainable housing options in terms of type, cost, and location". Another value is "A diversified and strong local economy competitive at regional, state and national levels". The Deephaven- Buchholz mixed-use redevelopment proposal checks the boxes for all these value statements. B. ALTERNATIVE ACTIONS: 1. Motion to adopt Resolution #2020-05 requesting the City Council call for a public hearing related to the establishment of a Redevelopment TIF District #1-45 supporting Deephaven-Buchholz Block 52 Redevelopment proposal. Ua EDA Agenda: 02/23/22 2. Motion to table consideration of Resolution #2020-05 for further research and/or discussion. C. STAFF RECOMMENDATION: Staff recommends Alternative #1. Deephaven-Buchholz is proposing a redevelopment plan which is intended to meet the overall goals and objectives cited in the Comprehensive Plan, SAP and the EDA Workplan. Block 52's core location, existing conditions (including a mix of blighted and obsolete buildings), and low property valuations are well documented. With that knowledge, the EDA has focused on Block 52 redevelopment efforts as its number one Workplan priority for several years. The developer's proposal is an opportunity to leverage public-private resources to undertake a significant Block 52 redevelopment which may also act as a catalyst for other potential nearby downtown revitalization efforts. D. SUPPORTING DATA: A. Resolution #2022-05 B. TIF Application with supporting exhibits C. Deephaven-Buchholz Development Proposal Illustrations D. Downtown SAP Excerpts and Comprehensive Plan 2040 Statements E. TIF #1-44 Review and Approval Calendar CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-05 RESOLUTION REQUESTING A PUBLIC HEARING ON THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 1-45 BE IT RESOLVED, by the Board of Commissioners (the "Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: WHEREAS, the City Council (the "Council") of the City of Monticello, Minnesota (the "City") previously established its Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project") and has previously created multiple tax increment financing districts within the Redevelopment Project, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"), in an effort to encourage the redevelopment and development of certain designated areas within the City; and WHEREAS, the City has transferred the administration and control of its tax increment financing districts to the Authority; and WHEREAS, the Authority recognizes an ongoing need to encourage economic development opportunities within the Redevelopment Project; and WHEREAS, the Authority is proposing the creation of Tax Increment Financing District No. 1-45 (the "TIF District"), a redevelopment district, within the Redevelopment Project, and the approval of a Tax Increment Financing Plan ("TIF Plan") for the TIF District, pursuant to and in accordance with Section 469.175 of the TIF Act, for the purpose of redeveloping certain areas within the City for use as a mixed use development; and WHEREAS, the creation of tax increment financing districts must be approved by the City Council (the "Council") of the City after a duly noticed public hearing. NOW, THEREFORE BE IT RESOLVED by the Board as follows: The Authority hereby requests that the Council call for a public hearing to be held on or after May 23, 2022, to consider the proposed establishment of the TIF District and the adoption of a TIF Plan for the TIF District, and to cause notice of said public hearing to be given as required by law. 2. The Authority directs the Executive Director to transmit copies of the TIF Plan to the Planning Commission of the City and requests the Planning Commission's written opinion indicating whether the proposed TIF Plan is in accordance with the Comprehensive Plan of the City, prior to the date of the public hearing. 3. The Executive Director of the Authority is hereby directed to submit a copy of the TIF Plan to the Council for its approval. MN190\159\778625.v1 4. The Authority directs the Executive Director to transmit the TIF Plan to Wright County and Independent School District No. 882 (Monticello Public Schools) not later than April 22, 2022. 5. Staff and consultants are authorized and directed to take all other steps necessary to prepare the TIF Plan and related documents and to undertake other actions necessary to bring the TIF Plan before the Council. Adopted by the Board of Commissioners of the City of Monticello Economic Development Authority this 23rd day of February, 2022. President Attest: Executive Director MN190\159\778625.v1 L —I BUCHHOLZ P R 0 P E R T I E S To: The City of Monticello From: Deephaven Development LLC Deephaven Development is committed to redeveloping the site commonly known as Block 52 which is located at the NW corner of Broadway and Pine St in Monticello, MN. We have taken the following steps forward in making this project a reality. 1) As far back as 2018 we began researching the economic viability of redeveloping this iconic site. 2) We are fully engaged with the City of Monticello and have entered into a pre -development agreement. 3) We have invested significant time as well as financial resources in order to plan, research feasibility, and have networked with a number of commercial tenants. For full context, we also thought it would be helpful to give a brief background on our company and history as a whole. Deephaven Development LLC is an entity of Dale Buchholz Construction/Buchholz Properties. Dale Buchholz Construction has developed over 2000 residential units, several commercial projects, and in general, has over 30 years of site selection, construction, and development experience. In addition to the abovementioned experience, Buchholz Properties currently has approximately 1900 residential units under management. Currently, we are constructing projects in Elk River, MN and another development unrelated to Block 52 in Monticello, MN. We also have substantial construction projects underway in Bismarck, ND and Mandan, ND. Another relevant project to Block 52 was completed in 2018 by Dale Buchholz Construction. The redevelopment involved a 130 unit apartment community, on what was once a highly contaminated and funded in part with the assistance of an Environmental Protection Agency Grant, MN Deed Contamination Grant, and TIF assistance. Similar to Block 52 the site had sat vacant for a number of years. The project involved the removal of 10,800 tons of chlorinated soils and 4,900 tons of petroleum impacted soil and was described by the MPCA as a "prospective Superfund site" if not cleaned up. Upon completion of this project, the redevelopment was selected as a runner-up for the "MN Brown Fields Rescape Award". We were not only honored, but very proud to be nominated for this award as many in the community of Moorhead had concluded that the site would never be developed. What is true is that without the public assistance and the unwavering support of these various governmental agencies this project would not have been economically unfeasible and thus the site would have remained contaminated and vacant indefinitely. Instead as the City of Moorhead notes "This project and the new residents it drew to this area has been a catalyst for additional growth in this important downtown adjacent area." The Brownfield press release credits the project with creating 8 redevelopment projects since its completion. Along with our application we have included the press release from Minnesota Brownfield on the project as well as a combined testimonial letter from the City of Moorhead and Moorhead Economic Development. We strongly believe that Block 52 is capable of being the same catalyst for growth and job creation in the Monticello downtown corridor. The unique attributes of Block 52 which include nearly 40,000 cars that pass by the site per day and its close proximity to some of Monticello's largest employers make it a natural location for commercial development. The amazing views of the Mississippi River, city parks, and other walkable amenities will make it a sought after location for residents to "live, work, and play". However without the help of public assistance the redevelopment of Block 52, like the above reference Moorhead project, would not have been economically feasible given the extraordinary redevelopment cost. We are drawn to this site not only because we see its potential for a mix of commercial and residential development, but also because we feel a moral and ethical responsibility of cleaning up a site that has environmental issues. If awarded the Tax Increment Financing Package (TIF) and Redevelopment Grant it will be utilized for a number of categories within the "eligible costs." The redevelopment will require a number of public infrastructure improvements, extensive demolition, and interior environmental abatement including but not limited to asbestos. A decade is far too long for such a highly visible site and one with so much potential to sit vacant. This is why we are seeking the opportunity to partner with the City of Monticello, the State of Minnesota to bring the Block 52 redevelopment to fruition. Thank you for your time and consideration. Mark Buchholz President, Deephaven Development LLC 1/29/22, 10:37 AM M I MINNESOTA BROWNFIELDS EDUCATION. RESEARCH. PARTNERSHIPS. The Grove Apartments - MN Brownfields The Grove Apartments Location: 1521 1 st Ave N, Moorhead, MN 56560 Nominated by: Braun Intertec Corporation The Grove Apartments are three four-story buildings with 135 units, featuring modern designer finishes, a heated attached parking garage and a variety of other amenities. The development is located in the east gateway entrance area of the City of Moorhead. The property has an extended environmental history dating back to the late 1800s. Formerly, the property served as a railroad, an auto repair and salvage yard, and a manufacturing site. It was a vacant lot since 2011 and prior to that, buildings sat empty for several years, and had been underutilized for decades. At one time, the MPCA coined the property a "prospective Superfund site," if not cleaned up. Although the City of Moorhead has limited "green land" available for development, the environmental encumbrances associated with the property held back its redevelopment, and consequently the redevelopment of nearby sites. Since 2000, Moorhead has been persistent in its efforts to revitalize these sites, including undertaking investigations, acquiring land, demolishing structures, and improving infrastructure. A u f W Land Recycling 101 - Home Brownfields Definitions Benefits of Cleanup & Redevelopment Common Obstacles to Brownfield Redevelopment Remediating Brownfields Case Studies RECENT CASE STUDIES Hook and Ladder Apartments Brook Avenue Co-op and Maya Commons Great River Landing https://mnbrownfields.org/case-studies/the-grove-apartments/ 1/3 1/29/22, 10:37 AM The Grove Apartments - MN Brownfields Remediation of the site involved the removal of 10,800 tons Colder Products of chlorinated soil and 4,900 tons of petroleum impacted Company soil. Less -impacted soil was reused on-site in berms and Corporate under pavement. The removal of contaminated soil will also Headquarters protect groundwater and its eventual discharge into the Park 7 Red River. Active soil vapor mitigation systems were Mino Oski Ain installed beneath the newly constructed buildings. Dah Young Minnesota The property will generate an estimated 245 thousand Drive Medical dollars in taxes annually, as compared the prior value of Campus just over 1,000 dollars. Further, acting as a local pioneer, McGough since The Grove Apartments project began redevelopment Company in 2016, eight new redevelopments have been initiated in Headquarters the area, totaling an additional $18 million in investment. Union Flats Additionally, the City of Moorhead has benefited from Apartments housing opportunities, new employment opportunities, and Straight River increased spending at local businesses. Apartments Project Financing and Straight River City Park • $14,50,000 - Private Capital of Dale Buchholz The Grove Construction Apartments • $50,000 - Environmental Protection Agency Allianz Field Investigation Grant The Maven on • $903,636 - MN DEED Contamination Cleanup Grant Broadway Northern • $896,364 - City Tax Increment Financing Stacks VII Block 518 Project Partners Richfield Lake • Dale Buchholz Construction (Developer) Amphitheater Metro Deaf • City of Moorhead (Land assemblage/Project sponsor) School • MPCA (Environmental Regulatory Oversight) Capital Region • MN DEED (Contamination Cleanup Grant) Watershed • Federal EPA (Investigation Grant) District Office • Braun Intertec (Environmental and geotechnical services) • Landwehr construction (General Contractor) • Rhet Fiskness Architect (Architect) • Sandman Construction (Structural engineering) • MBN Engineering (Civil planning) https://mnbrownfields.org/Gase-studies/the-grove-apartments/ 2/3 April 12, 2019 Re: Downtown Moorhead redevelopment project To whom it may concern: Moorhead's V Ave N corridor is transitioning from primarily industrial uses to a mixed used corridor in the heart of our city. Once such site that recently underwent this transition is "The Grove," a site previously used as an aggregate batch plant and now home to 135 housing units. The multi -family residential project was constructed in three phases. It included two 48 -unit buildings with an approximate market value of $4.2 million each and a 39 -unit building with an approximate market value of $4 million. The City of Moorhead and the Moorhead Economic Development Authority worked together to identify the project site, assemble property, demolish the existing structures, and market the site to find a developer who was able to deliver a large enough project to fund mitigation of the highly contaminated site. In 2015, Mark Buchholz, Dale Buchholz Construction, came forward as the developer to take on a project of this magnitude. The Minnesota Pollution Control Agency (MPGA) had identified this site and listed it as a concerned site for chlorinate vapor. The site was heavily impacted by chlorinated solvents, petroleum, and polycyclic aromatic hydrocarbons (PAHs). The City of Moorhead and the developer worked together to obtain a Contamination Cleanup Grant of $1.2M from the State of Minnesota. The project also received Tax Increment Financing (Pay -Go TIF) for the remaining $600,000 of environmental cleanup costs. This project and the new residents it drew to this area has been be a catalyst for additional growth in this important downtown adjacent area. Sincerely, Christina Volkers, City Manager City of Moorhead Email: c_kris.volkers@cityofinoorhead.com 1" Derrick LaPoint, President/CEO Downtown Moorhead Inc. cilapoint@dtmoorhead.org City of Moorhead 1 500 Center Avenue I PO Box 779 1 Moorhead MN 56561 1 www.cityofmoorhead.com CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY BUSINESS SUBSIDY APPLICATION BUSINESS ASSISTANCE FINANCING Legal name of applicant: Deephaven Development LLC or as assigns Address: 4510 3rd St S Moorhead, MN 56560 Telephone number: 701-371-1646 Name of contact person: Mark Buchholz REQUESTED INFORMATION Addendum shall be attached hereto addressing in detail the following: 1. A map showing the exact boundaries of proposed development. 2. Give a general description of the project including size and location of building(s); business type or use; traffic information including parking, projected vehicle counts and traffic flow; timing of the project; estimated market value following completion. 1 The existing Comprehensive Guide Plan Land Use designation and zoning of the property. Include a statement as to how the proposed development will conform to the land use designation and how the property will be zoned. 4. A statement identifying how the increment assistance will be used and why it is necessary to undertake the project. 5. A statement identifying the public benefits of the proposal including estimated increase in property valuation, new jobs to be created, hourly wages and other community assets. 6. A written description of the developer's business, principals, history and past projects I understand that the application fee will be used for EDA staff and consultant costs and may be partially refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If the initial application fee is insufficient, I will be responsible for additional deposits. SIGNATURE Applicant's signature: Date: 1/31/22 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Application for Business Assistance Financing GENERAL INFORMATION: Business Name: Deephaven Development LLC Address: 4510 3rd St S Moorhead, MN 56560 Type (Partnership, etc.): LLC Authorized Representative: Mark Buchholz Date: 1/31/22 Phone: 701-371-1646 Description of Business: Real estate investment and holdings Legal Counsel: Tami Diehm, Winthrop & Weinstine Address: 225 South 6th St Minneapolis, MN 55402 FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? No 2. Have you ever defaulted on any loan commitment? NO 3. Have you applied for conventional financing for the project? Yes 4. List financial references: a. Marc Knutson Bank Forward 701-306-1490 b. Eric Halvorson Bell Bank 701-799-7542 c. Jordan Cook Border Bank 701-388-2032 2 Phone: 612-604-6400 5. Have you ever used Business Assistance Financing before? If yes, what, where and when? PROJECT INFORMATION: No 1. Location of Proposed Project: NW Corner of Broadway and Pine St in Monticello, MN Approx $5.51VI net present value based on 2. Amount of Business Assistance requested? current financial estimates To offset extraordinary expenses. Including, but not limited 3. Need for Business Assistance: to demolition, excavation, utilities, acquisition, etc... 4. Present ownership of site: EDA and City of Monticello 5. Number of permanent jobs created as a result of project? 70-80 new full time equivalent jobs 6. Estimated annual sales: Present: $10M -$15M Estimated Future: 2% annual increase 7. Market value of project following completion: $26M -$30M 8. Anticipated start date: .lune 2022 FINANCIAL INFORMATION: 1. Estimated project related costs: a. Land acquisition b. Site development c. Building cost d. Equipment e. Architectural/engineering fee f. Legal fees g. Off-site development costs S1 $1,100,000 $21,975,000 $325,000 $450,000 $50,000 $1,100,000 $25,000,001 Total 3 Completion Date: December 2023 2. Source of financing: a. Private financing institution b. Tax increment funds c. Other public funds d. Developer equity $18,750,000 Approx $5.5M net present value Transportation Grant $460K, Deed Grant $550K, Land $2.6M $6,250,000 PLEASE INCLUDE: 1. Preliminary financial commitment from bank. 2. Plans and drawing of project. 3. Background material of company. 4. Pro Forma analysis. 5. Financial statements. 6. Statement of property ownership or control. 7. Payment of application fee of $10,000. 8 BOUNDARY SURVEY OF BLOCK 52 Pl \\ $88', BSP \\ y- / `tea,' / / 41* � 1 aq aAOA •• / o ►� BH U8 N Nvr v E 58 LEGEND 0 H nvc wm v.Ls Ha. 2P2e, SC.MF w FEET d. SPOT [IEVAnoH \ R PBOPkFry tnutarr. ll d* 52. My w Yen11cW. PIRCpS mwvc ED Blas 32, OIe�tli PUT O YOfnCEUR vk%hi Onnty. 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W nr«... woe•» W} ==4-=— oryowumo .. �,Pansvc__.__1HoaubtwlP 7672�O�P�i t63N2JOBD�tj MONTICELLO MIXED USE RIVER STREET 4 OVER 2 PODIUM MIXED USE BUILDING LOWER LEVEL PARKING 1st FLOOR COMMERCIAL i 2nd FLOOR RESIDENTIAL I 3rd FLOOR RESIDENTIAL 4th FLOOR RESIDENTIAL I5th FLOOR RESIDENTIAL MEZZANINE MECH./LOFTS (19) EFFICIENCY UNIT (17) ONE BEDROOM (3) ONE BEDROOM + DEN (40) TWO BEDROOM (2) TWO BEDROOM + LOFT (6) THREE BEDROOM (87) TOTAL UNITS BROADWAY LOWER LEVEll BROADWAY OPTION MONTICELLO MINED USE J w oC cn z J Q 4th FLOOR RIVER STREET BROADWAY H w w o� cn w z E: OPTION MONTICELLO MINED USE J W w oc cn z J Q 5th FLOOR RIVER STREET BROADWAY w w o� cn w z H: OPTION MONTICELLO MINED USE J W Lu oc cn z J Q MEZZANINE RIVER STREET BROADWAY w w o� cn w z H: ,it 25 I_ �H7 LOGO lol!F.t NSUMNm FILL ,it Monticello 2040 - VISION + PLAN - PHASE ONE I JANUARY 2020 This first phase of the Comprehensive Plan process, the Visioning phase, included a community engagement process to identify common values, growth aspirations and a vision to inform the planning direction for the next 20 years. The vision, value statements and preferred development scenario will serve as the foundation for creating the new Comprehensive Plan during the second phase of the planning process. The Comprehensive Plan provides a set of goals, policies and strategies for achieving Monticello's vision for the future. 11 In 2040 the City of Monticello is an inclusive community focused around sustainable growth while maintaining its small-town character. Monticello is a Mississippi River town known for its schools, parks, biking and walking trails and vibrant downtown. Monticello is an evolving, friendly and safe community that respects the quality of its environment, fosters a sense of belonging and connection, encourages a healthy and active lifestyle and supports innovation to promote a prosperous economy. A safe, clean, and beautiful community supported by caring and helpful residents. A network of parks, open space and trail connections that provide recreation opportunities. An inclusive community welcoming people of all ages, races, religions and ethnic backgrounds. A diversified and strong local economy competitive at regional, state and national levels. A vibrant downtown that embraces the River and provides a focal point for the community. A healthy community focused on physical and mental health and wellness of its residents. A range of attainable housing options in terms of type, cost, and location. A respected school and education system serving the community. A balanced land use and transportation framework that provides options and connectivity. A thriving arts and culture scene that reflects the creativity of the community and supports a sense of place. Monticello 2040 - VISION + PLAN - PHASE ONE I JANUARY 2020 Development Assumptions 0 Sustainability - Focus on sustainability, open space and wetland preservation throughout City. Q Infill Development - New service commercial and light industrial infill. Q Conservation Neighborhoods - Single-family housing developed as conservation subdivisions in a clustered fashion mitigating impacts to sensitive areas. Q Industrial Expansion - Full build out and expansion of Otter Creek Industrial Park and growth around future Interchange. Q Multi -Family Housing - New multi -family infill development near core of downtown and other focus areas. 0 New School - New elementary and middle school campus with environmental focus. Q Downtown - Downtown plan implementation thriving with new commercial, mixed-use and public realm improvements. Q Mississippi River - Focus on River with new access, connections and rive rfront trail. 0 New Employment Center - New industrial business park developed around new interchange with green technology, renewable energy, manufacturing and other uses. 0 Xcel Facility - The Xcel Monticello Nuclear Generating Plant is licensed through 2030 and will seek relicensing to 2040. Q Annexation Area - Portions of the Orderly Annexation Area are designated as an Urban Reserve for future development. Development would likely include conservation single-family cluster subdivisions. Note: The Preferred Scenario guidance and mapping provided in the Vision Report will be further refined during the Comprehensive Plan process. This map is not the City of Monticello's final Land Use Plan. This map provides initial guidance for the next phase of the project, the Comprehensive Plan, and will be further detailed and refined. D INCREMENTAL, SUSTAINABLE Growth Scenario The preferred development scenario is the result of community feedback on the four previous scenarios and the community's vision. The community envisions Monticello in 2040 as an environmentally and economically sustainable community that has experienced strong, balanced growth. Key Preferred Scenario Aspects Downtown Focus 6 Industrial and Employment Q New School 0 Conservation Neighborhoods Otter Creek Industrial Park M —I pr- "FA- ft - Technology, Renewable Energy, OManufacturing & Distribution Warehousing ILI Potential School Site with U Retail and Commercial Trails and Open Space AN H , Multi -Family 10-18 Unit/Acre Commercial/Residential Mix (Neo Traditional) Development Residential (South) 8-10 Units/Acre �A Downtown Mixed Use 10-18 Unit/Acre '. LRegionalOriented� Commercial _ ..W I- L vicCommercial Light Industria Infill DOWNTOWN MIXED-USE (DMU) The Downtown Mixed -Use designation applies to the area of Monticello commonly known as the Downtown and further identified in the 2017 Downtown Monticello "Small Area Plan". This designation includes a commitment to retain Broadway as Monticello's Main Street, supporting existing businesses, improving connections to and relationship with the River, and creating new downtown housing opportunities along Walnut and Cedar Avenues. The purpose is to create a Downtown that is lively throughout the day and into the evening at all times of the year. Typically uses include retail, restaurants, local serving offices and services, as well as residential uses above the ground floor. Some ground floor residential uses may be allowed along Walnut, Cedar, 3rd or 4th Streets among others, subject to the location and discretion of the City. Commercial • Retail • Offices • Personal Services • Professional Services • Restaurants/Cafes • Recreation and Entertainment Residential • Multi -Family Residential Recreational • Parks/Playgrounds Primary Mode Pedestrian -friendly streetscape AVehicular (slow speeds) Secondary Mode G�b Bicycle facilities and parking 11 Transit or shuttle service • Density - 25+ units/acre (Medium to High Density Residential) • Floor Area Ratio (FAR) 0.50 to 4.0 • Height - Up to 6 stories • Lot Area - N/A Hyl 2018 Correlating J Zoning District CCD Community Commercial District («(« LAND USE, GROWTH AND ORDERLY ANNEXATION LAND USE, GROWTH AND ORDERLY ANNEXATION GOALS Listed below are the land use goals which were informed by the Community Vision. For the complete set of policies and strategies for the goals refer to the Implementation Chapter. GOAL 1: GROWTH AND CHANGE A City that prioritizes growth inward by concentrating development activities within the existing cityboundaries and grows or develops into the OrderlyAnnexation Area only when development is proposed or planned contiguous to city boundaries, sensitive open space lands are protected and thoughtfully incorporated into the development pattern, and the land is serviced by appropriate utility and transportation systems. MENOL GOAL 2: COMPLETE NEIGHBORHOODS A City that prioritizes growth inward by concentrating development activities within the existing city boundaries and grows or develops into the Orderly Annexation Area only when development is proposed or planned contiguous to city boundaries, sensitive open space lands are protected and thoughtfully incorporated into the development pattern, and the land is serviced by appropriate utility and transportation systems. Successful, vibrant commercial centers and corridors that can adapt over time and provide a place for shopping, services, civic activities, entertainment, and arts and culture. GOAL 4: REVITALIZED MIXED-USE DOWNTOWN A revitalized mixed-use downtown that embraces the River and serves as the heart of the community and focus of civic activity that is lively throughout the day and night consisting of a variety of dining, shopping, recreation, celebrating, gathering and living opportunities. ii L 5: ACTIVE EMPLOYMENT CENTERS Monticello as a strong and growing regional employment center including a variety of economic sectors established as the preferred location for manufacturing, technology, research, and development, and home to a diverse mix of businesses and industries. An open space"frame around and woven throughont►c�mplemented by the Mississippi River, Bertram Chain of Lakes Regional Park, other local and regional parks, trails and recreation areas which together protect the City's natural resources, lakes, wetlands and woodlands, and provide opportunities for recreation, enhance visual beauty, and shape the City's character. MONTICELLO 2040 VISION + PLAN 95 Background and Purpose The purpose of this Plan is to attract and direct investments on the core blocks of Downtown Monticello, MN over the next 10 years. The Plan advocates for solidifying Downtown as the heart of the community with a series of coordinated public and private investments. Together, these investments will create a human -scaled environment that encourages gathering, socializing, visiting and enjoying on a daily basis - throughout the year. The improvements outlined in this Plan aim to build on the unique qualities of Monticello to make the Downtown yet more attractive to those who have chosen to live and do business in the community. Specifically, the Plan seeks to promote Broadway Street as a storefront district with restaurants and specialty retail, celebrate the River for its recreational, connective and economic qualities, reinvigorate a downtown housing market with multiple, appropriately scaled, infill projects, and improve the experience of Pine Street for all users. The plan is ambitious, but achievable. Over time and upon completion, the plan would usher in up to 500 new units of downtown housing, new restaurants overlooking the river, and unique retail and services on Broadway. Momentum can be established in the next few years. Primary projects to be completed within five years include: redevelopment of Block 52, Walnut Street connection to River Street and infill housing on Walnut Street. Implementation of this Plan will create two legacies. The first will be a revitalized Downtown with an economy and attractions that benefit all residents of Monticello. Equally important, however to the physical improvements described above will be the legacy of new partnerships and civic cooperation that are essential to and will result from coordinated actions. The ideas set forth in this Plan come from the vested interest of the Monticello community through a broad public outreach effort. The realization of these ideas rely on a coordinated, cooperative, and active public sector working in tandem with an entrepreneurial private sector The result will be a lively Downtown for all in Monticello, a place that embodies both its history and future aspirations. Goals � 0 0 weodtlw FFU E] I,. .�� 4 Improve Pine Street for All Users C STI C" Shift the Center of Town to Walnut and Broadway Encourage Small and Medium Scaled Investments "` _X City of Monticello Downtown Small Area Plan I Executive Summary 0 NOTE:7his illustration depicts new deveopment on both private and public properties. The plan does not i Tu compel private property owners to change anything regarding how they use their land. Rather, the Plan is a /i� t. guide for change if the property owner chooses to do so. Please see page—for an illustration of the Master Plan as it applies to publicly held properties only. The City will endeavor to work with' existing business who wish to remain, revitalize and expand in the downtown.- City of Monticello Downtown Small Area Plan I Executive Summary 0 Downtown is For Everyone Downtown Monticello is and shall remain the heart of the community. It is the birthplace of the City and the focus of civic activity. This Plan builds off those foundational qualities with a clear vision for the future of the core blocks of Downtown. The vision includes a commitment to retaining Broadway as Monticello's Main Street, supporting existing businesses, improving connections to and relationship with the River, and creating new downtown housing opportunities along Walnut and Cedar Avenues for existing and new Monticello residents. The Plan envisions a Downtown that is lively throughout the day and into the evening, 12 months of the year. A downtown that serves many purposes for many people - including dining, recreation, celebrating, gathering, shopping and living. Illustrative Master Plan The Plan above describes a potential long term build out of the core blocks of Downtown Monticello. Character Areas Similar to the Embracing Downtown Plan, the Plan divides the study area into four different character Areas. The purpose of this is to create sub -areas in downtown, each with its own identity and purpose and direction. The character areas are developed based on their context and their future role in the downtown. Typically each character area is a mix of uses, but also has a dominant use. Character Area: Riverfront A redesigned Park with an amphitheater and better relationship to Downtown will help connect the River to Downtown Character Area: Walnut Street and Cedar Street Walnut and Cedar Streets will fill in with new housing (2-4 stories) that adds to the market strength of downtown and provides additional housing choices for new and existing residents of Monticello. Their intersections with Broadway will be improved to make it easier to walk to the Riverfront Character Area: Broadway Monticello's Main Street will transition over time from a street with primarily services, to one with unique retail and restaurants. t Character Area: Pine Street (TH 25) The community will reclaim Pine Street by maintaining it's width and adding pedestrian amenities and local serving commercial uses. City of Monticello Downtown Small Area Plan I Executive Summary 0 Frameworks Land Use, Open Space and Transportation are the three frameworks that organize and define the physical environment. As with systems in the human body, each must function independently - and together with - the others. If one fails, they all fail. This is why it is important to understand frameworks as individual systems that must function as part of a single Downtown. The Plan is also divided into frameworks in order to allow different agencies, departments, and investors act in concert with each other. This will help ensure public and private investments are coordinated, less risky, and more publicly acceptable. Framework: Open Space and Parks (Primary recommednations) • Improve Riverfront Parks to accommodate more programming and events • Redesign Walnut Street and River Street to allow for park extention during events • Convert vacant lots on Broadway to small pocket parks • Utilize River islands for additional natural park space • Create pedestrian refuges or enhanced building entry ways on the corners of blocks along Pine Street • Enliven open spaces with public art wherever possible Framework: Access and Circulation • Emphasize connectivity throughout the Core, with pedestrian and bike friendly streets, a complete sidewalk system, and connectivity to the in -town neighborhoods. • Promote a "complete streets" policy that balances the needs of all users in the Downtown. • Manage and improve the grid system to support connectivity and access throughout Downtown • Work with MnDOT to improve Pine Street for users of Downtown Monticello, including additional signals, maintaining the River Street signal and supporting an additional river crossing • Improve pedestrian crossings of Broadway at Walnut and Cedar to improve access to the Riverfront • Reconnect Walnut Street with River Street Framework: Development and Land Use • Riverfront District with destination restaurant and entertainment uses, as well as housing • Broadway District with shopfront retail and restaurant uses beneath housing and offices • In -town neighborhoods extend to Walnut and Cedar Street with new infill housing 2-4 stories (apartments and townhouses) Additional recomendations are included in the Framewoirks Section pages 25-32 :N 9 Open Space and Parks J 7� Access and Circulation Development and land Use Immediate Next Steps and Implementation 1. Improve the physical environment with streetscape, benches, programming, and art. 2. Bolster Broadway with a facade improvement program and retail recruitment. 3. Aggressively market development opportunities such as Block 52 and infill housing on Walnut and Cedar Street 4. Enact the appropriate policies, programs and incentives that enable the type of development described in the Plan. How is This Plan Related to the Embracing Downtown Plan and the Comprehensive Plan? In 2010, the City of Monticello completed the "Embracing Downtown Plan". The full area considered to be "Downtown Monticello"extends from Interstate I-94 to the Mississippi River, and generally from Cedar Street to Maple Street. The Embracing Downtown Plan was adopted as an appendix to the Comprehensive Plan. Changes in the retail marketplace overall, and more specifically market changes and reinvestments in downtown Monticello, have created a need to develop a new planning perspective for the core blocks of the downtown. This document therefore is an update to the 2008 Monticello Comprehensive Plan and to the Embracing Downtown Plan for the Downtown. This Plan will replace the Embracing Downtown plan as an appendix to the Comprehensive Plan. City of Monticello Downtown Small Area Plan I Executive Summary 0 Project Goals I Shift the Center and Double Down on Broadway. Over time the travel and use patterns of Downtown have changed - altering the overall experience of downtown. Up until 1960, despite Broadway's designation as a State Highway (152) most travel was local. However, as the region grew, Monticello became a crossroads - thereby burdening Broadway and Pine Street with high volumes of through traffic and widened streets. Today, the Broadway / Pine Street intersection is one of the most traveled intersections in the region. Whereas that quality makes for great visibility, it also makes for a poor pedestrian experience and poor access to adjacent properties. Broadway, west of Pine Street, is relatively lightly traveled and unlike Broadwway east of Pine Street, it has retained its pedestrian scale. Furthermore, the City has developed successful parks at the end of Cedar Street and Walnut Street. Therefore, an opportunity exists to fully extend Walnut and Cedar Street down to the park and grow the downtown mercantile district towards the riverfront along Broadway. Improve the Pine Street Experience for Everyone. Whether passing through Monticello along Pine Street (TH 25), trying to cross Pine Street by foot, or going to a business along Pine Street, the experience of using Pine Street is generally a negative one for all users. The environment of Pine Street projects a negative image and it is a divider between the east and west side of the town. Whereas Pine Street will always be a heavily traveled street, it does not need to be a negative experience. The community can take it back, claiming it for more appropriate development types, making it safer, more pleasant, and attractive for all users. Lots of Small Investments, a few medium ones and just one or two big ones. Monticello, despite it's growth, is proud to be a small town. Small towns develop charm and character through a series of small incremental investments that together add up to help a place become memorable and beloved. Simple investments such as new awnings, improved lighting and well maintained landscaping can make a big impression. Small buildings that fit on vacant parcels or otherwise underutilized land can happen quickly - adding vitality to a community. By promoting a high quantity of smaller investments (1/4 block and smaller) and medium scaled redevelopment projects (up to 1/2 block in scale), the Downtown will become more diverse, more lively, more responsive and adaptable to changes in the market place. A few medium scaled investments, warranted by a strong market or a strategic need, are important and valuable. But they should be carefully scaled and implemented so as to not disrupt the fragile fabric of the small town. r 11 Engage and love the riverfront. Go beyond the Swan. Great places have unique assets that differentiate them from others. Monticello has the Mississippi River. This defining feature can be further utilized to the benefit of Monticello residents and businesses. A riverfront that is well connected with blue and green trails, is publicly accessible and is activated throughout the day and the year can become a defining feature for the City and an important driver of economic activity. City of Monticello Small Area Plan I Goals and Objectives Character Areas: Purpose The Plan divides the study area into four different Character Areas. The purpose of this is to create sub- areas in downtown, each with its own identity and purpose and direction. The character areas are developed based on their context and their future role in the downtown. Typically each character area is a mix of uses, but also has a dominant use. eWalnut Street JEW- 1114�=r Q Broadway 0 Pine Street How does the Plan Balance Flexibility with Predictability The Plan describes a Vision for Downtown as a lively place with pedestrian scaled spaces and building. The Plan favors human scaled spaces over vehicular scaled spaces; multiple small investments over single large investments and coordinated actions over individual directions. The Plan is based on time -tested approaches to town building and urban design as well as the strong sentiments received in the public process. This vision is described in words and illustrations throughout the document. Generally, the Character Area Section uses illustrative drawings to describe the feel and image of a place while the Frameworks section generally uses conceptual diagrams that convey broad ideas and concepts. Together, the Plan gives directions for how to arrange buildings, infrastructure and open space so the resulting ensemble is consistent with the Vision. The use of both illustrative, precise, and diagrammatic illustrations is intentional in an effort to create predictability and offer flexibility. This is a long range plan that relies on a multitude of investors working in a coordinated manner. Therefore the correct balance of predictability and flexibility is important because a balance of predictability and flexibility attracts investment while the lack of predictability and flexibility repels investment. Adoption of this Plan by City Council is intended to be a strong statement of predictability because it sets in motion several public actions designed to implement the Vision of the Plan. So, while the Plan (in locations) is exact and precise, it recognizes that the end result may or may not look exactly like the illustrations because individual investors and developers will interpret the Plan slightly different, each adding their own expertise and nuance to the Plan. This is encouraged because it will add richness and nuance to the end result. City of Monticello Downtown Small Area Plan I Character Areas M Riverfront Riverfront Character Area: The and recomendations guidelines on this page pertain to the area colored on this diagram Perspective from Walnut street, looking across a redesigned West Bridge Park Despite being a town born on the River, the Downtown does not take great advantage of its unique location. Broadway is a block removed from the Riverfront and the main connection to the River, Walnut Street, ends in a staircase. The entry experience to Monticello from the north is mundane with vacant properties and a thick wall of trees that obscures potential views to public spaces and Downtown. The Riverfront Character Area will become a proud new public gathering space for Downtown Monticello that compliments Broadway and the full Monticello Park System. The Plan recommends redesigning the riverfront parks so they are more visible, accessible, active and flexible and promoting development that takes advantage of access to the river. A new park will be capable of handling larger crowds for events, and will be more accessible and usable on a daily basis with additional amenities and features designed for everyday use. The Plan promotes access to the riverfront by extending Walnut Street to connect to River Street. It will be designed as a multi- use street that can be closed for farmers markets, gatherings, and other events. The Plan recommends and leveraging public property of Block 52 to create a new signature development with market rate housing and a destination restaurant or entertainment use overlooking the park and the river. Public parking is maintained on Block 52 and added to River Street. existing _r Bridge Park River St Block 52 Broadway Site Sections Through Block 52 and West Bridge Park 0 Redesign Riverfront parks to ©Encourage new housing include more active events and surrounding the riverfront programming in West Bridge Park parks on vacant and (amphitheater, water feature, underutilized parcels concessions) and passive uses in Maintain and improve the east bridge park. 0 intersection at River Street 0 Add parking and sidewalks to and Pine Street. River Street 0 Improve the underpass of OStreet Reconnect Walnut Street to River design Pine Street at the River. with a that allows Walnut Street be for © Consider a seasonal bridge to used to the island to provide events and park expansion. additional recreational OWork with the private sector to activity to east and west create a signature development Bridge park on Block 52, with market rate housing and a restaurant that overlooks the Park Precedent Images City of Monticello Downtown Small Area Plan I Character Areas Broadway Broadway Character Area: The and recomendations guidelines on this page pertain to the area colored on this diagram Perspective on Broadway, looking west with a pocket park across the street Broadway - west of Pine Street - has remained physically intact as Downtown's primary storefront district. Broadway is relatively well-maintained and home to several services and community anchors such as the Cornerstone Cafe. However, with growth of retail along the highway and elsewhere in town, Broadway is no longer a competitive location for general retail. The Plan recommends re -positioning the center of Downtown from the Pine/Broadway intersection to the Broadway/Walnut intersection. This will be partially accomplished with intersection improvements that make it easier to cross Broadway at Walnut Street. This should include curb extensions, fewer through lanes, clearer crosswalks, blinkers and eventually as warranted, a four-way stop sign. These improvements will increase the flow of pedestrian and bike traffic to the river and in between stores on both sides of Broadway. Small pocket parks can be developed on vacant lots mid -block on Broadway. These spaces can serve as convenient pedestrian connections between parking areas mid bloc and the sidewalks on Broadway. In addition, they can be small plazas with seating for resting, gathering, and even restaurants if the buildings next to them can be opened up to the pocket parks. Existing Conditions Modify striping and median on Broadway 0 create a safer pedestrian environment. Small pocket parks on vacant properties that 0 offer respite from Broadway and pedestrian connections to parking in the middle of the block Curb extensions at Walnut and Broadway to 0 provide space for landscaping, seating, and gathering ONew development that replicates the storefront scale currently present on Broadway. New buildings should have flexible interiors so a main street scale can be accomplished in larger buildings. © Facade improvement programs that improve signage, awnings, and general appearance of existing storefronts on Broadway -------- ---'---------- — —----------""�� '� ° — — -- - - - - -------------- ~ II c ---- --- -----------u a New development along Broadway is encouraged if it replicates the scale of existing Proposed Lane _ buildings and shopfronts. Buildings up to four stories, with storefronts located on the Configurations on sidewalk and doors every 45' feet will fit in comfortably with existing buildings. Allowances Broadway w for 10 foot setbacks from the sidewalk to create additional pedestrian amenities (such as seating) are appropriate. The Plan does not recommend additional widening of Broadway. Instead, the Plan recommends working with partners to find other measures to mitigate congestion. ------------------------- r 000�o ----oo oo�o a— ---------------H c y --------------- U a City of Monticello Downtown Small Area Plan I Character Areas Existing Proposed Pedestrian 75 Feet 63 Feet Crossing width Across Broadway East -bound Left Turn Lane Stacking Capacity 8 Cars 21 Cars 0 Existing Conditions Modify striping and median on Broadway 0 create a safer pedestrian environment. Small pocket parks on vacant properties that 0 offer respite from Broadway and pedestrian connections to parking in the middle of the block Curb extensions at Walnut and Broadway to 0 provide space for landscaping, seating, and gathering ONew development that replicates the storefront scale currently present on Broadway. New buildings should have flexible interiors so a main street scale can be accomplished in larger buildings. © Facade improvement programs that improve signage, awnings, and general appearance of existing storefronts on Broadway -------- ---'---------- — —----------""�� '� ° — — -- - - - - -------------- ~ II c ---- --- -----------u a New development along Broadway is encouraged if it replicates the scale of existing Proposed Lane _ buildings and shopfronts. Buildings up to four stories, with storefronts located on the Configurations on sidewalk and doors every 45' feet will fit in comfortably with existing buildings. Allowances Broadway w for 10 foot setbacks from the sidewalk to create additional pedestrian amenities (such as seating) are appropriate. The Plan does not recommend additional widening of Broadway. Instead, the Plan recommends working with partners to find other measures to mitigate congestion. ------------------------- r 000�o ----oo oo�o a— ---------------H c y --------------- U a City of Monticello Downtown Small Area Plan I Character Areas Block 52 Block 52 (Public ownership in blue) Block 52 is a key block in the Downtown. It is highly visible and it sits on the West Bridge Park. The site slopes approximately 15' from Broadway to River Street. Broadway and Walnut contain mercantile buildings of varying quality. River Street has vacant parcels and underutilized buildings. Active Frontage Flexible Frontage (either Active or Residential) Frontage And Ground Floor Uses Active frontages (high transparency) and uses (retail and restaurants) should be located on Broadway, Walnut, and the west half of River Street. The remainder of the block is flexible - it can have either residential or active frontages. Building Setback l� Pocket Park & Open Space Setbacks, Pocket Parks & Open Space Buildings should define the perimeter of the Block. Minor setbacks (5'-10') for overhangs, seating, and display of goods is permitted on Broadway and Walnut. A more generous setback is permitted on Pine due to traffic volumes and access. Attached corner plazas are encouraged on the northwest corner of the block and permitted on the northeast and southeast corners. Surface Parking Access Way Parking & Servicing Access to mid block parking is encouraged on Pine Street and Walnut St. Parking should have minimal exposure to Broadway, River or Walnut St but should be large enough to replace the existing public parking lot on the block and should be expandable if the south side of the block redevelops. Careful consideration should be given to visibility and access to parking from Pine St since that will be the primary access as the site will be approached from the Bridge. Extra signage or a turning lane may be required. t1 rTaik<1�1 %\ 00 E► Bred -� C a� dy ■ Options The two illustrations above show potential options for development on Block 52 - both adhering to the guidelines. The top illustration shows new development on Broadway, articulated at a Main Street scale, with a corner plaza and a covered pass through as a form of pocket park. The bottom illustration shows a single corner development on Broadway, with a pocket park. Approaching Downtown from the Bridge Block 52 is the Gateway Block to Downtown from the Bridge. It is important to create an easy way for visitors to access mid -block parking as they approach downtown. The image to the left shows the approach - with enhanced landscaping, a turn lane, and clear signage to direct drivers to parking mid -block. City of Monticello Downtown Small Area Plan I Character Areas N Frameworks: Purpose Land Use, Open Space and Transportation are the three frameworks that organize and define the physical environment. As with systems in the human body, each must function independently - and together with - the others. If one fails, others are impacted. This is why it is important to understand frameworks as individual systems that must function as part of a single Downtown. The Plan is also divided into frameworks in order to allow different agencies, departments, and investors to act in concert with each other. This will help ensure public and private investments are coordinated, less risky, and more publicly acceptable. — Required Retail Frontage — Small Retail Opportunities Commercial Mixed -Use Multi -Family Housing Public Employment Pa rk/Open S pace/Cemetery �♦ 1 .♦ ♦• 1 Core Study Area Frameworks: Land Use and Development Development patterns that support social interaction, local character, and a compact connected and walkable environment. General Approach The Land Use Plan promotes a development pattern that recognizes the essential role that Downtowns plays in the communities they serve. Successful Downtowns tend to be places that serve many functions for the full cross section of the community throughout the year and across generations. They are places to gather, eat, live, shop, celebrate, protest, recreate, meet, be entertained, and to visit. They are places that promote social interactions and the unique creative expression of the community. At their best, Downtowns are places that exude pride because they represent the best the community has to offer. In order to promote these ideals, this Plan favors policies and development patterns that improve downtown for those who currently use it and patterns that support the places that people value. Therefore, development patterns and land uses in this Plan seek to support the Main Street character of Broadway, the importance of Walnut Street as a promenade to the River, regional and local needs of Pine Street, and the riverfront as the birthplace of the City. This Plan also recognizes the traditional (and still relevant) role of Downtown Monticello as well as the changing nature of small Downtowns throughout the country. In doing so, the Plan is committed to retaining the small scale shopfront District on Broadway by encouraging uses that value "experience" over "convenience". At the same time, the Plan encourages Pine Street (the regional face of downtown) to develop as a corridor that emphasizes convenience and accessibility. Together, both Broadway and Pine Street can complement each other to create a downtown that attracts a wide range of investments. Physically, the Plan favors compact walkable small town design with a fine grained mix of uses. The Plan arranges development types and land uses so valued places are supported, and new investments can add to the overall vitality of downtown. Recommendations • Create a Center to Downtown that is active throughout the day and into the evening - year round. The Walnut / Broadway Intersection should become the heart of this area. • Improve connections to the River by locating uses that benefit from open spaces and activities associated with the River. • Improve the entry experience from the north. • Maintain a shopfront District along Broadway, west of Pine Street comprised of traditional main street (mercantile) buildings that have retail/restaurant space on the ground floor and wither housing or offices above. • Create a development pattern on Pine Street that benefits from high visibility and regional access. • Infill Walnut Street and Cedar Street with mid scale housing (2-4 stories) that creates an effective transition between the in -town neighborhoods and the Downtown. City of Monticello Downtown Small Area Plan I Character Areas N Frameworks: Parks and Open Spaces Parks, Plazas, and Sidewalks that are lively, safe and pleasant to be in. ®® j eroda Wdy � Improved Pedestrian 0 and Bicycle Crossing ■ Community Parks Neighborhood Parks E� Pocket Parks WestBridge _, Ppm East Bric Park erodawdy ®� Seasonal Bridge Public Gardens Convertible Streets Pedestrian Promenade to River Proposed Bituminous Trail Connections oonno Existing Bituminous Trial ® ® ® ® MRTTrail Sledding Hill General Approach Parks and Open Space play an important role in distinguishing the Downtown from other areas of Monticello. Unlike much of Monticello where parks are generally programmed for recreational / sports and defined by trees and greenery, the parks downtown should focus on gathering and general social interaction as well as planned events. Therefore, in order to support and enhance the environment for downtown residents and businesses, this Plan expands the definition of parks beyond the valued park spaces that are already in use - namely Front Street Park, East and West Bridge Park. The Downtown Parks should also take in consideration the needs of new downtown residents and visitors. Upon implementation of this plan, several hundred new residents will be living in the downtown. It is likely that new downtown housing will be more compact and with less outdoor space than typical single family homes. Inevitably this will result in park demands that don't currently exist. Meeting these needs is a great opportunity to further develop a well designed and well connected park and open space system. Fla Illustrative Master Plan: East and West Bridge Park Recommendations • Redesign East and West Bridge park to include an amphitheater, water feature, riverfront access, picnicking, and additional space for passive park use. • Improve Front Street Park to include improved boat landing and space for nature oriented programming. • Connect the two Bridge Parks with Front Street Park with improved pathways and trails. Design all three parks as a single park with multiple uses. • Provide access to the islands with a seasonal bridge • Create small pocket parks mid block on Broadway to offer plazas that connect to parking lots in the middle of the block. • Redesign Walnut Street between River Street and Broadway as a special street that can be closed and used for festivals and events throughout the year. • Consider all sidewalks for opportunities to enhance greenery and public art. Emphasize Walnut Street, River Street and Broadway as the main pedestrian corridors in Downtown. • Use public art throughout the parks and corridors to distinguish Downtown as a place of cultural expression and celebration. • Work closely with local businesses, residents (new and existing) to ensure local parks and open spaces are appropriately designed and programmed for their varied needs. • Modify the Embracing Downtown Plan that recommends off street bike paths on Pine Street. In lieu of this off-street path, create north / south bike access to the river along Walnut and Cedar through a complete streets policy. Encourage bicycle crossing of Pine Street at 4th, River and 7th Street. • Maintain sidewalks and paths along TH25 City of Monticello Downtown Small Area Plan I Character Areas Frameworks: Circulation and Access A complete network of flexible streets that favors the needs of residents, businesses, and visitors. 01, 0 Traffic Calming IM11 Improved Pedestrian Crossing AW (J4 Signalized Intersection F� Access Way © Surface Parking - - - Interstate 94 mmm= Pine Street (MN 25) ', mmm= Broadway Street (CSAH 75) Pedestrian Promenade to River Add Sidewalks to Complete Grid General Approach The design of the streets (and the full right of ways) in downtown have a significant bearing on how downtown functions and feels. The rights-of-way in the Downtown should be designed to create a comfortable and safe physical environment that encourages a range of activities and development types. The Plan recommendations, therefore, favor a high quality, well-connected, and flexible street system that facilitates all users of downtown - especially those who are using and not passing through Downtown. With two main roads bisecting downtown, traffic volumes are relatively high. This provides an opportunity to capture additional business downtown, but it also can have a deleterious impact on the pedestrian and business environment in some locations. Recognizing this situation, previous Plans have emphasized Walnut Street as a main pedestrian connection to the River (not Pine Street). This Plan supports that idea and offers several ways in which that can be further achieved. This Plan departs from previous Plans in that it also encourages pedestrian activity on streets other than Walnut - this includes, Broadway, Pine Street and Cedar. While the Plan recognizes the regional function of Broadway and Pine, the Plan strives to balance this function with the local needs of community connectivity, aesthetics, pedestrian safety, and multi -modal travel. Successful Downtowns are not just easy to get to, they are pleasant to be in and to stay for multiple reasons. Therefore, this Plan, discourages future road widenings that would have further negative impacts on pedestrians Downtown - especially along the primary pedestrian corridors and districts. In lieu of road widenings, the Plan champions an well connected and balanced urban street grid system that can be programmed to flex and contract as needed to meet all the needs of Downtown. Accomplishing this goal will require a series of smaller interventions (signal timing, street connections, traffic controls, traffic calming, time -of -day -parking restrictions, modified property access, etc.) in lieu of wholesale street widening that would likely have a negative physical impact on the built environment of Downtown. The Plan also supports a street network where the Level of Service for pedestrians, transit riders, and cyclists are considered on equal terms to those of motorists and delay measurements from modelling are considered as a portion of overall average trip, not in isolation. Recommendations • Connect Walnut Street to River Street • Maintain the River Street / Pine Street signal as the formal entrance to Downtown and an important pedestrian connection across Pine Street. • Add a traffic signal at 4th and Pine to help balance the grid and turning movements at the Pine / Broadway Intersection. • Modify Walnut / Broadway and Cedar / Walnut Broadway intersection to prioritize pedestrian crossings and access to the river. • Narrow the travel lanes on Walnut Street, add parallel parking, where possible and ensure continuous safe and pleasant sidewalks. • Add sidewalks at the perimeter of blocks where they are not currently present • Discourage direct property access to Pine Street; favoring the side streets wherever possible with through -block lanes or easements. • Allow direct property access to Block 52 from Pine Street in order to reduce volumes at the Pine / Broadway intersection. • Discourage deceleration lanes; encourage speeds that do not require them. • Consider traffic calming at River Street and Locust (or Linn) to prevent excessive speeds - similar to River Street and Cedar Street as an example City of Monticello Downtown Small Area Plan I Character Areas N Parking Recommendations Strategy Recommendation Create a parking program that focuses on creating available spaces for different user groups. Pilot a shared parking program in which private parking is shared with the "public." Priority #1 Maximize use of existing parking supply Enhance pedestrian access to existing parking lots by developing small pocket parks on Broadway Expand and clarify on -street parking supply on all blocks in downtown. Invest in and implements a comprehensive parking signage and Strategically invest in information wayfinding system. Continually monitor occupancy, availability and utilization of and technology parking throughout downtown Complete the sidewalk system in Downtown to make walking more Improve mobility options to reduce comfortable. Encourage bicycle access to Downtown with bike racks and clearly parking demand designated bike routes. Revise zoning code to better support walkable development in the Downtown core. Revise the zoning code to incentivize sharing of parking and Simplify and leverage the zoning code underground parking for residential buildings. Require Transportation Demand Management program for all development above a certain size. Adjust on street regulations and operations to maximize flexibility Enhance parking administration and at the curb Establish formal collaboration between the City, County, and other operations parking stakeholders. Provide Additional public parking as Strategically invest in public and shared parking supply in key needed locations. Key Principles for New Parking Supply • Ensure that parking is shared and open to the public to the greatest degree possible. • Manage new parking as part of the larger system so that prices and regulations primarily incentivize use by long-term parkers. If off street parking is more expensive than on street parking, people will continue to circle and create congestion. • Include technology and wayfinding that makes parking easy to locate and use. • Contribute to the downtown environment by supporting strong urban design, pedestrian access and safety, and promote street activity via ground floor uses. Specific Block By Block Recommendations Block 52: • provide 50 surface spaces for public use mid block when developing north half of block • locate residential parking underground • restripe Walnut Street with wider sidewalks for short term parking • provide short term on -street parking on River Street • expand public surface lot (50 spc) to south side of block when redeveloped. Block 51 • combine surface lots midblock • locate residential parking underground • provide short term on -street parking on River Street • provide short term on -street parking on Locust Street Block 35 • expand mid -block lot (15 spc)when redeveloping south west corner of block. • consider a midblock parking structure. This would require the re-routing of midblock utilities in order to preserve space for housing or other development to face the street. • locate residential parking underground Block 36 • maintain and expand mid block lot (15 spc) when redeveloping southwest corner of block • locate residential parking underground • provide short term on -street parking on 3rd Street Other • work with property owners on blocks 31, 32, 18,17 to create shared parking arrangements City of Monticello Downtown Small Area Plan I Character Areas N S M T W T F S 1 2 3 4 5 6 7 8M9 10 11 12 13 A 15 16 17 18 19 20 21 22 - 24 25 26 27 EN S M T W T F S 1 2 3 4 5 6 7 8010 11 12 13 = 15 16 17 18 19 20 21 22 - 24 25 26 27M 29 30 31 April 2022 S M T W T F S 1 2 34 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24M 26 27 28 29 30 S M T W T F S 1 2 4 5 6 7 8 10 12 13 14 15 16 17 18 19 20 21 22M 24 - 26 27 28 29 30 31 Preliminary for Discussion City of Monticello Central Monticello Redevelopment Project No. 1 Establishment of Tax Increment Financing District No. 1-45 Redevelopment TIF District Block 52 Public Hearing on May 23 February23 EDA considers TIF application from developer February 23 EDA request City Council call for hearing March 14 City Council calls for public hearing March 18 Preliminary Draft TIF Plan distributed April 12 Last day for written notice to County Commissioner April 22 Last day for notice and TIF plan and fiscal implications to County and School District May 3 Planning Commission review May 9 Last day to submit public hearing notice to newspaper, by 4pm May 12 Public hearing notice published in the newspaper May 23 Public hearing and establishment of TIF District S M T W T F S 1 2 3 4 56 8 9 10 11 June 8 12 14 15 16 17 18 19 20 21E2 23 24 25 26M 28 29 30 EDA approval of TIF, subject to Council approval * Timing of request for certification of the TIF District may occur before or after June 30, 2022. Timing will depend on specific facts for the project and timing for commencement of the project. N otes: 1City Council regular meeting dates. 2 Economic Development Authority (EDA) regular meeting dates. 3 Planning Commission regular meeting dates. 4 City publication dates need to be confirmed and added to calendar. NORTHLAND �,,r- PUBLIC FINANCE 2/3/2022 EDA: 02/23/22 8. Consideration of approving a Contract with Northland Securities, Inc. (NSI) in the amount of $10,535 for Financial Planning Services related to establishing Redevelopment Tax Increment Financing (TIF) District #145 (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider approving a specific project -based Contract with Northland Securities, Inc. (NSI) related to creation of Economic Development Tax Increment Financing (TIF) District #1-45 in support of Deephaven Development's proposed Block 52 redevelopment. In the TIF Application submitted by Deephaven Development, it indicates an expected total private sector investment of $25,000,000 to $26,000,000. The owner equity contribution is expected to be $6,250,000 or about 24 percent of the total. The proposal envisions developing 87 new market rate apartment units and 30,500 square feet of commercial space in Block 52. The submittal of the TIF application by Deephaven Development warrants EDA consideration of entering into a contract with NSI to obtain financial planning and analysis services as well as guidance in the required steps in establishing a new Redevelopment TIF District. The attached proposal outlines specific services related to development parcel valuation data, review of the proposed financing structure, the project pro forma and preparation of the critical "but for' findings. It also covers formatting and distribution of various notices, planning documents, completion of a TIF Plan and attendance at two key meetings. It does not include legal documents such as resolutions and development agreements. Ultimately, if a new Redevelopment TIF District is not approved by the City Council or the EDA, NSI will only bill for actual work performed based on an hourly rate of $215. NSI will also coordinate with the City's legal counsel as required for the project. Al. STAFF IMPACT: TIF Districts are extremely complicated tax -based financial assistance tools used to support new economic development proposals. There are several legal and critical financial review steps that are required in establishing a new TIF District. Under the proposed contract, NSI will analyze property value and financing data and prepare a TIF Plan specifically tailored to the proposal and the development site. They will also prepare the essential "but -for" findings. In-house staff will support and collaborate with NSI by providing application submittal materials and guidance related to EDA discussions regarding potential TIF assistance for Deephaven Development's redevelopment proposal. A2. BUDGET IMPACT: The funds to pay for the proposed NSI contract will come from the $12,500 TIF application fee from Deepahaven Development. Additional costs beyond the initial TIF fee will be invoiced to Deephaven Development as per NSI service invoices. Fees incurred for legal documents, contracts, resolutions, etc. related to establishing the TIF District are not included in the NSI services contract. Those costs will be separate and will also be invoiced to Deephaven Development. EDA: 02/23/22 B. ALTERNATIVE ACTIONS: 1. Motion to approve NSI Financial Planning Agreement for services related to creation of a Redevelopment TIF District 1-45. 2. Motion to table consideration of the NSI Financial Planning Agreement for services related to creation of Redevelopment TIF District 1-45. C. STAFF RECOMMENDATION: Staff recommends Alternative 1. The NSI Financial Planning Services Agreement is essential to ensure the EDA stays within the bounds of all required steps and notices when creating a new TIF District. TIF districts have impacts across several taxing jurisdictions (city, school district and county). Therefore, it important that staff have the support of consultants such as NSI to perform specialized TIF Plan analytical work and preparation of specific documents that are required in creating a new TIF District. D. SUPPORTING DATA: a. NSI Financial Planning Services Agreement —TIF District #1-45 b. TIF Review and Approval Calendar — TIF District #1-45 2 FINANCIAL PLANNING AGREEMENT BY AND BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND NORTHLAND SECURITIES, INC. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-45 This Agreement made and entered into by and between the City of Monticello Economic Development Authority, Minnesota (hereinafter the "EDA") and Northland Securities, Inc., of Minneapolis, Minnesota (hereinafter "NSI"). WITNESSETH WHEREAS, the EDA desires to use the services of NSI for financial planning assistance related the establishment of Tax Increment Financing (Redevelopment) District No. 1-45 (the "TIF District") to provide financial assistance for the construction of a mixed-use building consisting of approximately 87 housing units and commercial -retail on the first floor (the "Project"). WHEREAS, the Project is intended solely for financial planning and NSI is not providing advice on the timing, terms, structure or similar matters related to a specific bond issue. WHEREAS, NSI desires to furnish services to the EDA as hereinafter described. NOW, THEREFORE, it is agreed by and between the parties as follows: SERVICES TO BE PROVIDED BY NSI The scope of work will undertake the process and financial planning to establish the TIF District. Legal services to review the plan for the establishment of the TIF District (the "TIF Plan"), resolutions, and agreements are not provided by NSI and are not subject to this agreement. Any inspection services that may be needed to determine if the project meets the definition of "Substandard Building" as defined by Minnesota Statutes, Section 469.174, subdivision 10, are not provided by NSI and are not subject to this agreement. NSI will provide the following services: 1. Collect data for the TIF District and the Project, including: a. Parcel identification numbers for all parcels within the Development District and the TIF District. b. Estimated market value and tax capacity value for all parcels within the TIF District. c. Current property tax rates for all jurisdictions. d. Map showing project location and parcel boundaries. Agreement (Redevelopment TIF District) Page I 2. Evaluate and advise the EDA on the type of tax increment financing district and provide guidance on statutory finding 4. Collect data about the Project, including: a. Type, size, value, and timing of proposed development. b. Activities and estimated costs (project budget) to be paid by the TIF District. 5. Review basis for findings for establishing TIF District, including: a. Statutory criteria for proposed district. b. Developer justification ("but for") for the use of tax increment. c. Review and analyze Developer construction pro forma and operating pro forma for the Project. d. Prepare memorandum for the EDA presenting the findings. 6. Determine basic understanding of key criteria for the process including: a. Boundaries of Development District and the TIF District. b. Specific development objectives to address in the planning documents beyond the Project, including decertification of an existing tax increment financing district. c. Official newspaper and publication schedule. 7. Obtain any additional data not collected in item #1, including: a. Building permits issued for parcels in the TIF District over the past 18 months. b. Current comprehensive plan. 8. Set and distribute calendar of meetings and key dates. 9. Prepare notice of hearing and comply with statutory requirements for mailing and publication. 10. Assist the EDA's attorney with drafting of the development agreement for the Project. 11. Prepare planning documents including modification of the Development Program for the Development District and Tax Increment Financing Plan for the TIF District. 12. Distribute draft planning documents with letter of explanation and other supporting information to county and school district. 13. Assist with preparation of resolutions authorizing the TIF District and approving the TIF Plan. 14. Prepare and distribute resolution for planning commission findings, if necessary (scope does not include NSI attendance at planning commission meeting). 15. Prepare and distribute packet for public hearing including the TIF Plan and approving resolution. 16. Attend and facilitate the EDA meeting to consider approval of the TIF District and agreement for the Project. Agreement (Redevelopment TIF District) Page 2 16. Attend and facilitate the public hearing and City Council meeting to consider approval of the TIF District. 17. Prepare TIF transcript (electronic document). 18. Submit district for certification by the county. 19. File district with the State of Minnesota. The scope of services includes NSI attendance at two (2) meetings. COMPENSATION The budget for undertaking the tasks in this agreement is an amount not to exceed $10,535. The amount is based on the estimated number of hours required to complete these tasks at an hourly billing rate of $215 per hour plus reimbursable expenses for travel, printing, and mailing. NSI will bill on a monthly basis for actual services performed and reimbursable expenses. The EDA may at its discretion authorize NSI to undertake additional tasks, including meeting attendance, beyond the tasks listed above. Additional planning services will be billed monthly at a rate of $215 per hour. Invoices will detail the work performed, requested compensation for the period and show amounts previously billed. ASSIGNED NSI EMPLOYEE The NSI employee responsible for providing services pursuant to this agreement and for the services performed is Tammy Omdal, Managing Director. SUCCESSORS OR ASSIGNS The terms and provisions of this Agreement are binding upon and inure to the benefit of the EDA and NSI and their successors or assigns. DISCLAIMER In performing service under this agreement, NSI is relying on the accuracy of information provided by the developer for the proposed project and the EDA and the services provided by NSI are based on current State Law. The parties agree that the Minnesota property tax system and other laws may change and may affect the accuracy and validity of services provided by NSI. NSI will perform its work using the best available information. The EDA recognizes and accepts that future property values, tax levies and tax rates may vary from the assumptions used by NSI and such changes may affect the work product produced and provided by NSI. TERM OF THIS AGREEMENT This Agreement may be terminated by thirty (30) days written notice by either the EDA or NSI. In the event of early termination by the EDA, NSI shall provide the EDA with an itemized hourly statement of services already provided. All billable hours by NSI shall be billed at the stated hourly rates should early termination occur. Agreement (Redevelopment TIF District) Page 3 Dated this _ day of February, 2022. Northland Securities, Inc. By: Tam Omdal Managing Director City of Monticello Economic Development Authority Title Agreement (Redevelopment TIF District) Page 4 S M T W T F S 1 2 3 4 5 6 7 8M9 10 11 12 13 A 15 16 17 18 19 20 21 22 - 24 25 26 27 EN S M T W T F S 1 2 3 4 5 6 7 8010 11 12 13 = 15 16 17 18 19 20 21 22 - 24 25 26 27M 29 30 31 April 2022 S M T W T F S 1 2 34 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 23 24M 26 27 28 29 30 S M T W T F S 1 2 4 5 6 7 8 10 12 13 14 15 16 17 18 19 20 21 22M 24 - 26 27 28 29 30 31 Preliminary for Discussion City of Monticello Central Monticello Redevelopment Project No. 1 Establishment of Tax Increment Financing District No. 1-45 Redevelopment TIF District Block 52 Public Hearing on May 23 February23 EDA considers TIF application from developer February 23 EDA request City Council call for hearing March 14 City Council calls for public hearing March 18 Preliminary Draft TIF Plan distributed April 12 Last day for written notice to County Commissioner April 22 Last day for notice and TIF plan and fiscal implications to County and School District May 3 Planning Commission review May 9 Last day to submit public hearing notice to newspaper, by 4pm May 12 Public hearing notice published in the newspaper May 23 Public hearing and establishment of TIF District S M T W T F S 1 2 3 4 56 8 9 10 11 June 8 12 14 15 16 17 18 19 20 21E2 23 24 25 26M 28 29 30 EDA approval of TIF, subject to Council approval * Timing of request for certification of the TIF District may occur before or after June 30, 2022. Timing will depend on specific facts for the project and timing for commencement of the project. N otes: 1City Council regular meeting dates. 2 Economic Development Authority (EDA) regular meeting dates. 3 Planning Commission regular meeting dates. 4 City publication dates need to be confirmed and added to calendar. NORTHLAND �,,r- PUBLIC FINANCE 2/3/2022 EDA: 02/23/22 9. Consideration of adopting Resolution #2022-06 Calling for a Public Hearing for the sale of EDA owned land to M&B on Chelsea Road related to a proposed manufacturing facility expansion by Suburban Manufacturing (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution #2022-06 calling for a Public Hearing for the sale of EDA owned land to M&B on Chelsea Road related to a proposed manufacturing facility expansion by Suburban Manufacturing, 10531 Dalton Avenue, NE, Monticello, MN. Suburban Manufacturing is proposing to add a 21,400 +/- square foot addition to its existing 40,236 square foot facility. Suburban constructed its current building at this location in 2011-2012. They currently employ approximately 50 FTE staff at the facility. Suburban's expansion plans show the new addition on the south and the west sides of the current building. The existing parking and truck staging area will be impacted and need to be relocated farther to the south on the site. As a result, a small area of the EDA owned lot just south of Suburban Manufacturing property needs to be added to the Suburban property to allow the expansion to proceed as currently designed. Related to the process of the proposed land sale to M&B on Chelsea, LLC, the ownership entity of the Suburban facility, there will also be adjustments to the stormwater drainage public infrastructure as well as the need for a new preliminary and final plat creating the new lots in the configuration as proposed. Lot size impacts will be a minor reduction in the size of the EDA lot, a modest increase in the ponding area slightly impacting the northern edge of the EDA lot and a slightly larger M&B on Chelsea, LLC lot. Ultimately, Suburban will also convey a small area of its property that lies in the stormwater pond located just west of its current building. To maintain tax exempt status of the Otter Creek Business Park lots, the City Council currently holds title to most of the undeveloped parcels, including the one involved in the Suburban proposal. The City Council will be asked to convey the land to the EDA and the EDA will convey the land to M&B on Chelsea, LLC. The Resolution contains an Exhibit with the metes and bounds legal description of the EDA land that is proposed to be conveyed to M&B on Chelsea, LLC. Also attached to the report is the new plat illustration showing the changes in the lot boundaries. The plat review and approval steps will be completed by the Planning Commission and the City Council. If the EDA adopts the Resolution, the Public Hearing will be scheduled for April 13, 2022. The EDA will consider a Purchase and Development Agreement immediately following the land sale Public Hearing if all the proposal components and related steps are completed in the time and manner as expected. Please note Suburban is not seeking any EDA financial assistance to complete the proposed expansion. EDA: 02/23/22 Al. STAFF IMPACT: The staff impact associated with the land sale work tasks is modest. Staff involved include: the EDA attorney, the Community Development Director, and the Economic Development Manager. The WSB consulting engineering staff and the City Engineering staff have also been involved in the discussions regarding the stormwater drainage and pond adjustments that will need to be made to accommodate the expansion proposal. A2. BUDGET IMPACT: The EDA attorney has indicated that the Purchase and Development Agreement will have language requiring M&B on Chelsea, LLC to pay for the legal fees that are incurred working on this proposal. Those fees will be collected from the buyer along with land sale proceeds at the transaction closing. B. ALTERNATIVE ACTIONS: 1. Motion to approve EDA Resolution #2022-06 calling for a Public Hearing on April 13, 2022 regarding a proposed land sale to M&B on Chelsea related to an expansion proposal by Suburban Manufacturing. 2. Motion to table consideration of EDA Resolution #2022-06 for additional research and/or discussion as needed. C. STAFF RECOMMENDATION: Staff recommends Alternative 1. Suburban Manufacturing has proposed a facility expansion that involves a small area of EDA owned property. The total square footage of the needed EDA property is 11,263 square feet. M&B on Chelsea, LLC, the entity that owns the Suburban facility, is expecting to pay the market price for the functional EDA property. That amount is yet to be determined pending receipt of the adjustment costs from the consulting engineer which will be incorporated into the pricing schedule that the EDA uses to track its overall land purchase and development costs. D. SUPPORTING DATA: a. EDA Resolution #2022-06 b. Proposed Plat OCBP reflecting adjustments to accommodate Suburban Mfg. expansion proposal d. Legal Description of land area to be conveyed to M&B on Chelsea, LLC c. Illustration showing stormwater pond adjustments 2 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION #2022-06 AUTHORIZING CALLING A PUBLIC HEARING ON THE CONVEYANCE OF CERTAIN PROPERTY LOCATED IN THE CITY OF MONTICELLO WHEREAS, the City of Monticello Economic Development Authority, a body corporate and politic under the laws of the State of Minnesota (the "Authority"), is the owner of certain real property located in the City of Monticello, Minnesota (the "City"), and legally described in Exhibit A attached hereto (the "Property"); and WHEREAS, the Authority is authorized by Minnesota Statutes, Section 469.105, as amended, (the "Act") to sell or convey its property if it determines that the sale and conveyance thereof are in the best interest of the City; and WHEREAS, M&B on Chelsea, LLC, a Minnesota limited liability company or an affiliate thereof or an entity thereto (the "Developer"), has proposed to acquire the Property from the Authority and construct improvements to the Property related to the operation of its business; and WHEREAS, prior to the conveyance of the Property from the Authority to the Developer under the Act, the Board of Commissioners of the Authority is required to conduct a public hearing on the conveyance of the Property; and NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, AS FOLLOWS: The recitals set forth herein are incorporated into and made a part hereof. 2. The Board of Commissioners of the Authority will hold a public hearing regarding the sale and conveyance of the Property to the Developer on or after Wednesday, April 13, 2022 at 6:00 p.m. at the Monticello Community Center. The Executive Director of the Authority is authorized and directed to publish a notice substantially in the form attached hereto as EXHIBIT A in a newspaper of general circulation in the City at least 10 days but no more than 20 days prior to the date of the hearing. Adopted by the Board of Commissioners of the City of Monticello Economic Development Authority this 23rd day of February, 2022. President Attest: Executive Director EXHIBIT A NOTICE OF PUBLIC HEARING NOTICE is hereby given that the Board of Commissioners of the City of Monticello Economic Development Authority (the "EDA") will meet at the Monticello Community Center, 505 Walnut Street, Mississippi Room, Monticello, MN 55362 at or after 6:00 p.m. on Wednesday, April 13, 2022, to conduct a public hearing regarding the sale of certain property owned by the EDA (the "Property"). The Property is described as follows: That part of Outlot B, OTTER CREEK CROSSING 4TH ADDITION, according to the recorded plat thereof, Wright County, Minnesota, which lies easterly of the following described line: Beginning at the most northerly corner of Lot 1, Block 1, said OTTER CREEK CROSSING 4TH ADDITION; thence South 37 degrees 52 minutes 15 seconds West, assumed bearing along the common lot line between said Lot I and said Outlot B, a distance of 73.65 feet; thence South 47 degrees 51 minutes 30 seconds West, along said common lot line, a distance of 66.41 feet; thence North 87 degrees 18 minutes 42 seconds West, along said common lot line, a distance of 75.26 feet; thence North 70 degrees 24 minutes 21 seconds West, along said common lot line and its extension, a distance of 150.26 feet; thence South 34 degrees 00 minutes 00 seconds West, a distance of 415.70 feet to the southwesterly line of said Lot 1, and said line there terminating. That part of Outlot A, said OTTER CREEK CROSSING 4TH ADDITION, which lies easterly of the following described line: Beginning at the hereinbefore point of termination; thence South 34 degrees 00 minutes 00 seconds West, a distance of 35.23 feet to a line parallel with and 35.00 feet southwesterly of the northeasterly line of said Outlot A, thence South 49 degrees 29 minutes 27 seconds East, along said parallel line, a distance of 223.19 feet to the southeasterly line of said Outlot A, and said line there terminating. The EDA will consider the sale of the land under Minnesota Statutes, Section 469.105. A summary of the terms and conditions of the land sale is available for public inspection at City Hall. At the hearing, the EDA will meet to decide if the sale is advisable. Any persons wishing to express an opinion on the matters to be considered at the public hearing will be heard orally or in writing. Dated: , 2022 BY ORDER OF THE BOARD OF COMMISSIONERS OF THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY /s/Jim Thares Executive Director A-1 443429v1 JAE WA410-58 Lf') 1 O N N 1 Q J n z G LU J ry n H 0 PROPERTY DESCRIPTION Outlot A, OTTER CREEK CROSSING 3RD ADDITION, Wright County, Minnesota. AND Outlot A, OTTER CREEK CROSSING 4TH ADDITION, Wright County, Minnesota. AND Outlot B, OTTER CREEK CROSSING 4TH ADDITION, Wright County, Minnesota. AND Lot 1, Block 1, OTTER CREEK CROSSING 4TH ADDITION, Wright County, Minnesota. PROPERTY SUMMARY 1. Subject property's addresses are shown on survey. 2. Subject property's property identification numbers are shown on survey. 3. The gross area of the subject property is 1,012,405 Square Feet or 23.242 acres. SURVEY NOTES 1. The bearing system is based on the recorded plat of OTTER CREEK CROSSING 3RD ADDITION, having an assumed bearing of N00°25'16"E for the West line of Outlot A. 2. The vertical datum is based on NAVD88. 3. Field work was completed on 12/10/2021. PLAT AREAS Proposed plat areas are as follows: Lot 1, Block 1 = 473,100 Square Feet or 10.861 acres Lot 2, Block 1 = 221,846 Square Feet or 5.093 acres Lot 3, Block 1 = 204,092 Square Feet or 4.685 acres Outlot A = 113,367 Square Feet or 2.603 acres Total = 1,012,405 Square Feet or 23.242 acres ADDRESSES Owner: City of Monticello Surveyor: WSB 701 Xenia Avenue South, Suite 300 Minneapolis, MN 55416 NOTE: ALL UNDERLYING DRAINAGE AND UTILITY EASEMENTS DEDICATED BY THE PLAT OF OTTER CREEK CROSSING WHICH ARE WITHIN LOT 1, BLOCK 2, SAID OTTER CREEK CROSSING HAVE BEEN VACATED PER DOCUMENT. NO. A974166. VICINITY MAP CSAH NO. 39 �\\111 -I\� s y 'Ap 9Q 0 SECTION 10, TOWNSHIP 121, RANGE 25, WRIGHT COUNTY, MINNESOTA I I / ^ A I_I N 1 V\/. div LEGEND I — — — — — — I Q FOUND SECTION MONUMENT I \ FOUND MONUMENT O SET MONUMENT I \ SIGN DECIDUOUS TREE \ EVERGREEN TREE © PEDESTAL \ HAND HOLE I I \ \ \ FL TI FIBER OPTIC VAULT I I z \ \ LIGHT POLE w w 2 \ W ,a POWER POLE W Q I F GUY WIRE w U w \ ❑E ELECTRIC PANEL v w C \ ELECTRIC MANHOLE I O p N LL w ss CO Z SOIL BORING I I z 0 o z \ \ D FLARED END SECTION w Z o 0 z \ \ \ O ® CATCH BASIN w � w z fi U) Z \ \ \ ® BEEHIVE CATCH BASIN I U J tL H 2 O s� STORM MANHOLE w < LU � \ �s SANITARY MANHOLE I U a / Q SANITARY LIFT STATION IRR IRRIGATION CONTROL BOX � HYDRANT Z WATER VALVE �1 > SANITARY LINE STORM LINE I ��� �O. » / / \ \ rn O�� Off' . / \ X) \ WATER MAIN FD RLS 16233 — — S89°53' 4"E 494.44 , L'�� C UNDERGROUND COMMUNICATION � — E UNDERGROUND ELECTRIC \ T I I } F UNDERGROUND FIBER OPTIC 12 �I- y N N T EXISTING DRAINAGE AND I I } w O I ` UTILITY EASEMENT PER J o (� �\'� o� � 103.79 \ \ G UNDERGROUND GAS PLAT OF OTTER CREEK v00 OH OVERHEAD POWER I < p I I I N CROSSING 1ST ADDITION S89°53'44"E �/�� ll 110.63 \ FENCE I Z w U I o �� S89°53'44"E vS00°06'16"W I I QaY I I I I CURB & GUTTER I 0- w I C) \ ��- - 6 34.00 I 0 LO Q w I oO \ �\�7 FD RLS 42621 210 o \ HEDGE LINE I o Q w I O ! I i (� `� J z P. � _ 2��,s3 FD 1/2" \ I WO 1 J Ln I PIPE TREE LINE % i� I ` \ \ \ I \ \ \ F.p 1/2" PIPE (` �\ \\ o ` 4- 0 \ \ U I \ EDGE OF 2 \ BUILDING EDGE I \ J 41-7 Rte, I z, \ \\ \ \ �� DWETLAND 11 2 603 AC. _ LO �I I 1 h \ PLAT BOUNDARY �i I I z I O�6`% \OAC 00�� \� _ OUTLOT A �, ��, S�� 99 �o I t J� / < P D� DRAINA E AND UTILITY EASEMENT'S �' , PROPOSED LOT LINE C.0 z N z OWNER: CITY OF MONTICELLO \ sQ I \� p J P O Nj 4 / \ PROPOSED D and U EASEMENT LLJ rn I p ADDRESS: UNASSIGNED \ 90 n \� �\% �A j / P�� Otis ��� \ °?42, OV�ALL OF O OT P n, ' ^ % 7 CO v z PID: 155194000010 \ �92 \ 0� 5�� o I IT \ 2 ^ N12 -25'13"W I N I Q �/ G �Q 5 �J iso LAND BEING CONVEYED p w -, �'� I� - 6 V O I /1T 6 O z �-> I IU �/ Q UV IL_UI ,L. TO SUBURBAN LO z U I ITI �T A \� 1 — — _ W 1 — — _ �� .l C/ .,� ¢ 1 43.48 z a � � N90°00'00"W 210.00 \S G �h �� } O FD 1/2" 17 � 0 I I U I z `/ I L_v I n �9 P ``' 3� �, N87° 8 42"W 5 J w 0 PIPE o �O Hw \r �\ ��� O t<,� Dc� �dw0 L�NLAND BEING CONVEYED O I I v o U g \ \ �' G Q O � TO CITY OF MONTICELLO u) \ Q,� 5 Q,O ���' y, 0 w U Q />> O� z I I I a I w Q �_ J \ �� EXISTING t�,��<� 204,092 Q. FT. zQ / O. F- — -1 NOTE: ALL UNDERLYING I w LL w J \ O P -i zOND r0 / �/ 4.6 5 AC. OWNER: CITY OF MONTICELLO w w / ^^ 80 L — J DRAINAGE AND UTILITY I I LLI oN 11 \ \ (\�'��V / OT 3 ADDRESS: PID:155 31 DALTON AVE Z W O EASEMENTS DEDICATED BY I -- �� \ O� ��O \� `1 Q O THE PLAT OF OTTER CREEK I I Q I < 0 / w \ y OF P5�'�� p\r 4j L D BEING o w CROSSING 4TH ADDITION I \ G\(� ��0�^\\ NVEYED TO WHICH ARE WITHIN LOT 1, I I I 0���5��522 J UBURBAN BLOCK 1 AND OUTLOT B, SAID I LOT '� FD 1/2" PIPE . O O �_ 'I O 3,279 SQ. FT. OTTER CREEK CROSSING 4TH � FD 1/2" PI � J � \ 0.075 AC. i� I /�1 /� I ' 'I ` � / ADDITION ARE PROPOSED TO L_� I r I 473,100 SQ. FT. / < y FD 1/2" PIPE / // \ IL..Jr\ I Y / BE VACATED. I I � i I L_ 10.861 AC. LAND BEIDd JJCONVEYED Sr9 \ G-P���Q� TO CITY MONTICELLO 5,919 SQ. FT. 0.136 A�C. FDRLS L=� L=23.26 < \ ` \ ' \(J\ � 12- 25341R \9 R=30.00 s� � A=44o2455.;_ BLOCK / / FID 1/2"PIPE N8805 '0 '�W 30 .41 \ —,� — — — — Tr — — —\ \� — J- I S66 01 \ \ \ / �/ \ %11 IT FD 1/2" _/- i \\ /��\�.� vv I L_vT 1� I I \ 1 \ PIPE \ y \\/ \// \ LAND BEING \ / CONVEYED TO SUBURBAN LOT 2 7,984 SQ. FT.z x183 Ac. O �� < / 221,846 SQ. FT. �D 1/2" PIPENO \ 5.093 AC.141 \ OWNER: CITY OF MONTICELLO c � \ \ \ \ \ \\ --I ADDRESS: UNASSIGNED � � (J` \ \ L -�� \ \ PID:155223000010 d 1 \ I v �(b cls I \ � I O < \ N o� v v vii Lo I \� FD 1/2" PIPI' �tioss \ \ DRAINAGE AND UTILITY EASEMENTS ARE SHOWN THUS: 6 �{ N N l �-6 l N T T BEING 6 FEET IN WIDTH, UNLESS OTHERWISE INDICATED, AND ADJOINING LOT LINES, NOT TO SCALE AND 12 FEET IN WIDTH, UNLESS OTHERWISE INDICATED, AND ADJOINING RIGHT-OF-WAY LINES, AS SHOWN ON THE PLAT. QNN NQS?6,\ FID 1/2 \ / \ \ 7�o O - <, T PIPE V6' 06 S / 80 \ 7622,, -7 O \ \ d=95� \ I / \ L 4 T\ \ \ \ Graphic Scale (in feet) (90 0 100 200 1 inch = 100 feet wsb SCALE: DRAWN BY: 1" = 100' SURVEY BY: CHECK BY: SR JRH z O U) W 0Y z O H a U U UJ 0 UJ a 0 O z O } O Q W' J W W Z d M pO Q w Z 00 CL > Q =)nO Oz �=ZQ o 0 2~ J U) �mOJ _ (1) W ~WW Q Z = Q' > �QzOL)L d — W fn N 0 \ wU)W Of -J c� r W< �� N o 0 C: LLJpUzw =w _)Z p — W in J =) Preliminary Plat CD CL 4-0 NW I..L 0 CY)N (1) 0- 0 U c� 0 C: NO 2t U ^L 4-+ O WSB PROJECT NO. 019295-000 SHEET 1 OF 1 Location: City of Monticello Project No: 019295-000 Date: February 15, 2022 Description of land being conveyed to Suburban: That part of Outlot B, OTTER CREEK CROSSING 4TH ADDITION, according to the recorded plat thereof, Wright County, Minnesota, which lies easterly of the following described line: Beginning at the most northerly corner of Lot 1, Block 1, said OTTER CREEK CROSSING 4TH ADDITION; thence South 37 degrees 52 minutes 15 seconds West, assumed bearing along the common lot line between said Lot 1 and said Outlot B, a distance of 73.65 feet; thence South 47 degrees 51 minutes 30 seconds West, along said common lot line, a distance of 66.41 feet; thence North 87 degrees 18 minutes 42 seconds West, along said common lot line, a distance of 75.26 feet; thence North 70 degrees 24 minutes 21 seconds West, along said common lot line and its extension, a distance of 150.26 feet; thence South 34 degrees 00 minutes 00 seconds West, a distance of 415.70 feet to the southwesterly line of said Lot 1, and said line there terminating. AND That part of Outlot A, said OTTER CREEK CROSSING 4TH ADDITION, which lies easterly of the following described line: Beginning at the hereinbefore point of termination; thence South 34 degrees 00 minutes 00 seconds West, a distance of 35.23 feet to a line parallel with and 35.00 feet southwesterly of the northeasterly line of said Outlot A, thence South 49 degrees 29 minutes 27 seconds East, along said parallel line, a distance of 223.19 feet to the southeasterly line of said Outlot A, and said line there terminating. POND CONTOUR AREAS 927 - 66,218 SF (1.52 AC) 930 - 133,960 SF (3.08 AC) -0 NH ELEV 93 -3a <1 e 1 Irl - \ 932 - 178,542 SF (4.10 AC) H.Iso ` .✓ -�� \ ® RIM: 93 N FEE INV 924.]4 . 6INCH SCALE 1 - F 12' Q ` INV: 924.84 W CH \ o MFI 937 - - 936 935X. T W a \\ \\f\\ \ FF 937.5 G-933.49 EDGE OF t-- \ \\\\\ \ c \ \ \ O \ \ \ / \ \ 1341--LDE 933`5 \\\\\\\\\ \ \\\\ DWET AND_� \ I 2.60 Sl( \ \\ \ EXISTING \ \ \ POND \ \ \ \ \ \ \ \ \\ EB -935.0 5 LI U \EIT, T \ wsblA�'o SCALE: PLAN BY: DESIGN BY: CHECK BY: LLo�w m V 92578 / gap \929\ RET WALL f 'o" w \ \ \ \/ F E 9 EV: 93 .69 / F K Z LL 1-C - 935 ACE 5 LI U \EIT, T \ wsblA�'o SCALE: PLAN BY: DESIGN BY: CHECK BY: U) a O L W � o d ZO >' W LLo�w m UZO Zol"I W n > aa¢� o2' -c Q r0 Q 2 Z uj z 'o" w � r W Z F K Z LL W x Q d¢ N raoNo yy In N W F �_ w of w °o a F o O v� W wryo w S K = U 3 003 Q U) O Z J U W W _U Z W H Y > Z O NW cLr2i Lu 0 - LL G LL U Y O Lu a U O 02-07-22 WSB PROJECT NO. 019102-000 SHEET 1 OF 1 EDA Agenda — 02/23/2022 10. Consideration of Adopting Amended EDA Resolution #2022-01 Authorizing Submittal of a Redevelopment Grant Application to MN -DEED in the amount of $517,500 (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to adopt an amended Resolution #2022-01 authorizing submittal of a Redevelopment Grant Application to MN -DEED in the amount of $517,500 to be used to defray Block 52 redevelopment costs. DEED staff asked that the resolution language be changed clarifying that the EDA is indeed the applicant. The authorized signers for the EDA were also added into the Resolution language. Staff have responded to a couple of additional questions from MN -DEED regarding the grant submittal materials and may be asked to answer more in the coming weeks. More information regarding the status of the submittal will be provided to the EDA as it becomes available. Al. STAFF IMPACT: There is very limited staff impact in amending Resolution #2022-01. A2. BUDGET IMPACT: There are minimal expenses involved in amending Resolution #2022-01. B. ALTERNATIVE ACTIONS: 1. Motion to adopt amended Resolution #2022-01 authorizing submittal of a Redevelopment Grant Application to MN -DEED in the amount of $517,500. 2. Motion to table consideration of adopting amended Resolution #2022-01 authorizing submittal of a Redevelopment Grant Application to MN -DEED in the amount of $517,500 for further research and/or discussion. C. STAFF RECOMMENDATION: Staff recommends the EDA adopt amended Resolution #2022-01 clarifying language regarding the applicant of the grant funds and the authorized signers if the grant is awarded. The funding that is available through the Redevelopment Grant Program is specifically targeted to help cities complete redevelopment projects that include components like that in Block 52. If the EDA receives any award amount, it will help defray demolition and utility infrastructure on the Block 52 site. D. SUPPORTING DATA: A. Amended Resolution #2022-01 B. Redline — markup Resolution #2022-01 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-01 RESOLUTION AUTHORIZING SUBMITTAL OF REDEVELOPMENT GRANT APPLICATION TO MN -DEED IN THE AMOUNT OF $517,500 WHEREAS, the City of Monticello Economic Development Authority (Monticello EDA) is acting as the legal sponsor for project(s) contained in the Redevelopment Grant Program to be submitted on February 1, 2022, and that the EDA's President and Executive Director are hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the Monticello EDA. WHEREAS, the Monticello EDA has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate project administration. WHEREAS, the sources and amounts of the local match identified in the application ARE COMMITTED to the project identified. WHEREAS, if the project identified in the application fails to substantially provide the public benefits listed in the application within five years from the date of the grant award, the Monticello EDA may be required to repay 100 percent of the awarded grant per Minn. Stat. § 1161575 Subd. 4; WHEREAS, the Monticello EDA has not violated any Federal, State or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. WHEREAS, upon approval of its application by the state, the Monticello EDA may enter into an agreement with the State of Minnesota for the above referenced project(s), and that the Monticello EDA certifies that it will comply with all applicable laws and regulation as stated in all contract agreements. NOW, THEREFORE BE IT RESOLVED that the City of Monticello Economic Development Authority's President and Executive Director are hereby authorized to execute such agreements as are necessary to implement the project(s) on behalf of the applicant. I CERTIFY THAT the above resolution was adopted by the City of Monticello Economic Development Authority on January 12, 2022 and amended on February 23, 2022. Steve Johnson, EDA President Attest: Jim Thares, Executive Director CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-01 RESOLUTION AUTHORIZING SUBMITTAL OF REDEVELOPMENT GRANT APPLICATION TO MN -DEED IN THE AMOUNT OF $517,500 WHEREAS, Oeephaven Developmen* T�Q-the City of Monticello Economic Development Authority(Monticello EDA) act is actiniz as the legal sponsor for project(s) contained in the Redevelopment Grant Program to be submitted on February 1, 2022, and that the EDA's President and Executive Director i -s are hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of . the Monticello EDA. WHEREAS, Deeps a -ye Development r T r'. the Monticello EDA has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate project administration. WHEREAS, the sources and amounts of the local match identified in the application ARE COMMITTED to the project identified. WHEREAS, if the project identified in the application fails to substantially provide the public benefits listed in the application within five years from the date of the grant award, the Monticello EDA may be required to repay 100 percent of the awarded grant per Minn. Stat. § 116J.575 Subd. 4; WHEREAS, Deep a-ven Deve'„pY ei# T T r the Monticello EDA has not violated any Federal, State or local laws pertaining to fraud, bribery, graft, kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. WHEREAS, upon approval of its application by the state, Deeps a-ve„ Developmen4 T T r the Monticello EDA may enter into an agreement with the State of Minnesota for the above referenced project(s), and that . the Monticello EDA certifies that it will comply with all applicable laws and regulation as stated in all contract agreements. NOW, THEREFORE BE IT RESOLVED that the City of Monticello Economic Development Authority's President and Executive Director i -S are hereby authorized to execute such agreements as are necessary to implement the project(s) on behalf of the applicant. I CERTIFY THAT the above resolution was adopted by the City of Monticello Economic Development Authority of Deephaven Development LLC. on January 12, 2022. and amended on February 23, 2022. Steve Johnson, EDA President Attest: Jim Thares, Executive Director EDA Agenda: 02/23/22 11. Economic Development Director's Report (JT) A. AE2S Marketing — the first meeting was held. Focus group meetings are the next task. They are being organized and expect to be convened in the next 30 days. Interviews with key business and community leaders are also being scheduled. B. An EDA Workshop is proposed to be held on March 9, 2022 at 4:30 p.m. to discuss Block 52 Redevelopment Proposal Financial Models and/or Options C. Update on Lease Agreement with Preferred Title for use of a Portion of the Former DMV Building (119 — 3rd Street East) for File Storage D. Prospect List Update: Please see the updated Prospect List as Exhibit A. City Council Agenda: 02/14/2022 2W. Consideration of authorizing entering into a Lease Agreement with Preferred Title for use of a portion of the former DMV Building (119 - V Street East) for file storage Prepared by: Meeting Date: ❑ Regular Agenda Item Economic Development Manager 02/14/2022 ® Consent Agenda Item Reviewed by: Approved by: Community Development Director, City City Administrator Clerk, Finance Director ACTION REQUESTED Motion to authorize entering into a Lease Agreement with Preferred Title for use of a portion of the former DMV Building for file storage. REFERENCE AND BACKGROUND Due to the EDA's recent purchase of the Preferred Title property as part of the land assembly steps for the Block 52 redevelopment efforts, Preferred Title will be relocating to new office located at 225 West Broadway. The new location does not have sufficient space to accommodate file storage. As required under the URAA (Uniform Relocation Assistance Act) the EDA is providing a relocation benefit payment to Preferred Title to get reestablished in its new location. The fact that the new office space does not have sufficient storage for files means that potential additional costs may be incurred and paid out by the EDA for dedicated storage at another location. Those costs may be as much as an additional $15,600 for storage rental. A potential solution suggested by the relocation consultant is to utilize the vacant former DMV building which could possibly reduce the EDA's benefit payment costs. Preferred Title has endorsed this concept as it would keep the file storage close to the new office. City staff also support this as a potential win-win for Preferred Title (proximity) and the EDA (cost). Due to time constraints and the fast -evolving nature of the discussion and brainstorming of potential suitable storage ideas, the Lease Agreement is not attached to the staff report. Instead, staff is seeking City Council authorization to move forward with the concept so it will allow "relocation notices" to be provided to Preferred Title in the required timeline. A lease would have to be drafted and presented to the City Council for approval at a future meeting. To avoid causing the DMV building to become a taxable commercial property (currently tax exempt), it is envisioned that there would be no rental charge. The agreement would spell out various responsibilities of both parties and all insurance requirements. The EDA's relocation benefit payments extend for a one-year time period from the actual relocate date. For that City Council Agenda: 02/14/2022 reason, it would be best if the agreement included a one-year term, with the option to extend for an additional year upon mutual agreement between the City and Preferred Title. Budget Impact: The budget impact from the proposed Lease Agreement with Preferred Title may save the EDA up to $15,600 in required relocation benefit payments. The cost of legal fees related to drafting a Lease Agreement is estimated to be $400 to $600. II. Staff Workload Impact: The staff workload related to the proposed Lease Agreement for the former DMV building is modest. Staff involved in the discussion to date, include the Facilities Maintenance Supervisor, City Administrator, Community Development Director, Economic Development Manager, Finance Director and the relocation consultant. STAFF RECOMMENDED ACTION City staff recommends the City Council authorize the concept of a Lease Agreement between the City and Preferred Title for a portion of the space in the former DMV building for use as a file storage area for a one-year term, extendable upon mutual agreement, and at no cost. SUPPORTING DATA None 11/17/2016 6/22/2017 10/17/2017 5/22/2018 7/30/2018 8/10/2018 11/29/2018 12/14/2018 3/28/2019 5/9/2019 8/16/2019 9/19/2019 1/20/2020 02/04/2022 Building -Facility Retained Jobs New Jobs Total Investment Project Status 65,000 sq. ft. 0 55- $2,500,000 Active Search 100 58,000 sq. ft. 205 60 $10,831,000 Almost Done 70,000 sq. ft. 0 49 PROSPECT LIST Company Name Business Category Project Description MN DEED Prospect Metal Mfg. Exist Facility + Equip Project Armstrong Precision Machining New Facility Constr. + Equip UMC 20 $1,200,000 Project #6580 Metal Mfg. New Facility Constr. Project Ted Equipment Mfg. New Equipment Karlsburger Foods Food Products Mfg. Facilty Expansion Project Saturn Plastic Products Mfg. New Construction 02/04/2022 Building -Facility Retained Jobs New Jobs Total Investment Project Status 65,000 sq. ft. 0 55- $2,500,000 Active Search 100 58,000 sq. ft. 205 60 $10,831,000 Almost Done 70,000 sq. ft. 0 49 $5,480,000 On Hold N/A 45 ? $650,000 Concept Stage 20,000 sq. ft. +/- 42 10 to $4,500,000 Act -Plan -Fin 20 $1,200,000 Concept Stage 5,000 +/- sq. ft. 4+/- $830,000 Active Search Project Jupiter Metal Mfg. New Construction 5,000 sq. ft. +/- 3 $800,000 Active Search Project Blitzen Precision Machining Exist Bldg or New Const. 12,000 sq. ft. 10 $1,200,000 Concept Stage Project Comet Commercial Bus New Const. 1,700 sq. ft. +/- 7 $700,000 Active Search Project Nutt Co -Working Space Existing Building ? ? ? ? Concept Stage Project FSJP Light Mfg -Res. Lab New Construction 20,000 sq. ft. 0 20+/- $1,400,000 Active Search Project Jaguar Office New Construction 22,000 sq. ft. 22 4 $2,700,000 Active Search Project Kata Service New Construction 22,000 to 35,000 sq. a 0 25 $7,900,000 Concept Stage Project Panda v3 Service -Child Care New Construction 10,500 sq. ft. 0 21 $4,100,000 Active Search 3/31/2020 8/27/2020 1.2/23/2020 11/5/2020 2/16/2021 2/18/2021 2/18/2021 3/19/2021 4/23/2021 6/3/2021 Project GiaSaurus Medical Prod. Mfg. New Construction 175,000 sq. ft. 0 75 $50,000,000 Active Search Project Nuss Combo Service -sale New Construction 30,000 sq. ft. 0 20 to $3,500,000 Almost Done 30 Project BA710 Lt Assem-Distribute Project TO Industrial Existing or New Construction 10,000 to 15,000 sq. 0 5 to 7 $800,000 Concept Stage 0 60 $14,800,000 Cancelled ft. Project Flower Office Existing 7,000-8,000 sq. ft. 0 12 $750,000 Concept Stage Project Cold Industrial -Warehouse -Di New Construction 80,000 sq. ft. 0 21 $12,000,000 Concept Stage stri Project Shay Lounge -Restaurant Existing Bldg. 2,200 0 4 $150,000 Concept Stage Project Counsel Office -Service New Construction 5,600 sq. ft. A 24 3 $1,120,000 Building Completed Project Orion Warehouse-Distributi New Construction 832,500 sq. ft. 0 500 $125,000,000 Active Search on Project Emma Light Ind -Assembly New Construction 20,000 sq. ff. 0 4 $1,350,000 Active Search Project FCW Service New Construction w Redev 4,000 sq. ft. 0 9 $4,619,000 Concept Sta 6/16/2021 Project UBAA Child Care Services New Construction or Exist 5,000 sq. ft. 0 14 to 19 $2,000,000 Act Search 6/30/2021 Project Ecosphere Industrial Tech Mfg. New Construction 1,000,000 sq. ft. 0 1122 $85,000,000 Act Search 7/29/2021 Project BA710 Lt Assem-Distribute New Construction 6,500 to 7,000 sq. ft 0 10 $650,000 Active Search 8/12/2021 Project Integrity Precision Mfg. New Construction 100,000 sq. ft. 0 60 $14,800,000 Cancelled 10/28/2021 Project Stallion Technology Service New Construction 42,000 sq. ft. 40 $3,600,000 Active Search