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EDA Agenda - 10/12/2022AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, October 12th, 2022 — 6:00 p.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, Angela Schumann, Sarah Rathlisberger, Hayden Stensgard 1. Call to Order 2. Roll Call 3. Consideration of additional agenda items 4. Consent Agenda a. Consideration of Approving Regular Meeting Minutes —July 27, 2022 b. Consideration of Approving Workshop Meeting Minutes — August 10, 2022 c. Consideration of Approving Regular Meeting Minutes — August 10, 2022 d. Consideration of Approving Regular Meeting Minutes — August 18, 2022 e. Consideration of Approving Payment of Bills Regular Agenda 5. Consideration of Resolution No. 2022-29 authorizing a Master Amendment Agreement to the EDA $140,000 GMEF Loan Agreement with Sota Car Wash, LLC dba Due North 6. Consideration of Resolution No. 2022-30 authorizing a Purchase Agreement with Moon Motors for the acquisition of a 1.46-acre parcel described as Lot 1, Block 1, Oakwood Industrial Park, 3rd Addition, in the amount of $300,000 7. Consideration of Resolution No. 2022-31 authorizing an Option Agreement with Washburn Computer Group for a 1.46-acre industrial parcel described as Lot 1, Block 1, Oakwood Industrial Park, 3rd Addition 8. Consideration of Resolution No. 2022-32 Authorizing a Preliminary Development Agreement (PDA) with Moon Motors for a 9.764-acre parcel in Otter Creek Business Park (OCBP) described as, Lot 1, Block 1, Otter Creek Crossing, 7th Addition, for an industrial warehouse development project 9. Consideration of authorizing a Right of Entry for Headwaters Development for EDA owned property described at Outlot A, Country Club Manor, 16.71 acres, for the purposes of site excavation and grading activities related to the apartment and twin home development proposals 10. Economic Development Manager's Report 11. Recognition of Jim Davidson's service on EDA 12. Adjourn MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, July 27th, 2022 — 7:00 a.m. Mississippi Room, Monticello Community Center Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Tracy Hinz, 011ie Koropchak-White, Hali Sittig and Councilmembers Lloyd Hilgart and Jim Davidson Staff Present: Executive Director Jim Thares, Angela Schumann, Hayden Stensgard 1. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 7:01 a.m. 2. Roll Call 7:00 a.m. Mr. Johnson called the roll. 3. Consideration of Additional Agenda Items Executive Director Jim Thares noted that agenda item 6.5 had been added to the regular agenda following original disbursement of the agenda. 4. Consent Agenda Regular Agenda 5. Consideration of Resolution No. 2022-23 authorizing Amended, and Restated Purchase and Development Contract for Headwaters Development's apartment (TIF 1-42) development, Lot 1, Block 5 Country Club Manor, First Addition, related to inclusion of Supplemental Phase II Environmental Study document preparation, MPCA filings and Site Contamination Remediation costs in an amount not to exceed $80,000 in a pro- rata division for the Apts-Villas sites and a revised development schedule Agenda items 5 and 6 were considered companion items as part of this agenda. Mr. Thares provided an overview of the agenda item to the EDA and the public. Following the completion of a Phase I ESA, it was found that contaminants in the soil on site were likely, triggering the need for a Phase II ESA to be conducted. This item was brought forth to the EDA to consider sharing the costs of the supplemental Phase II with the developers of the proposed Country Club Manor First Addition. Treasurer Tracy Hinz asked if there was an understanding of where the contamination came from. Mr. Thares explained that it was almost certain that the contamination came from the dumping of street sweepings on site by public works. Brian Nicholson of Headwaters Development addressed the EDA and the public. Mr. Nicholson note that this step is a precautionary step to mitigate the contamination on site, so that the MPCA is comfortable with this proposal to move forward on the site. JON MORPHEW MOVED TO ADOPT RESOLUTION NO. 2022-23 AUTHORIZING AN AMENDED AND RESTATED PURCHASE AND DEVELOPMENT AGREEMENT FOR HEADWATERS DEVELOPMENT'S APARTMENT DEVELOPMENT PROPOSAL AT LOT 1, BLOCK 5, COUNTRY CLUB MANOR, FIRST ADDITION RELATED TO INCLUSION OF SUPPLEMENTAL PHASE II ENVIRONMENTAL STUDY DOCUMENT PREPARATION, MPCA FILINGS AND SITE CONTAMINATION REMEDIATION COSTS IN AN AMOUNT NOT TO EXCEED $80,000 IN A PRO-RATA DIVISION FOR THE APTS-VILLAS SITED AND A REVISED DEVELOPMENT SCHEDULE IN CONNECTION WITH TIF DISTRICT NO. 1-42. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 6. Consideration of Resolution No. 2022-24 authorizing Amended, and Restated Purchase and Development Contract for Headwaters Development's Twin homes (TIF 1-43) proposal at Country Club Manor parcel (16.71 acres — 7t" Street West) related to inclusion of Supplemental Phase II Environmental Study document preparation, MPCA filings and Site Contamination Remediation costs in an amount not to exceed $80,000 in a pro-rata division of $80,000 for the Apts-Villas sites and a revised development schedule Agenda items 5 and 6 were considered companion items as part of this agenda. JON MORPHEW MOVED TO ADOPT RESOLUTION NO. 2022-24 AUTHORIZING AN AMENDED AND RESTATED PURCHASE AND DEVELOPMENT AGREEMENT FOR HEADWATERS DEVELOPMENT'S TWIN HOME VILLAS DEVELOPMENT PROPOSAL AT THE COUNTRY CLUB MANOR SITE RELATED TO INCLUSION OF SUPPLEMENTAL PHASE II ENVIRONMENTAL STUDY DOCUMENT PREPARATION, MPCA FILINGS AND SITE CONTAMINATION REMEDIATION COSTS IN AN AMOUNT NOT TO EXCEED $80,000 IN A PRO-RATA DIVISION FOR THE APTS-VILLAS SITES AND A REVISED DEVELOPMENT SCHEDULE IN CONNECTION WITH TIF DISTRICT NO. 1-43. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 6.5. Consideration of authorizing a Right of Entry with Headwaters Development, LLC for Outlot A, Country Club Manor (16.71-acre EDA owned parcel) related to a Supplemental Phase II Study and follow up Response Action Pan (RAP) and Construction Contingency Plan (CCP) Mr. Thares provided an overview of the agenda item to the EDA and the public. This item is related to items 5 and 6 1 the agenda and is needed for the approved work to be completed. TRACY HINZ MOVED TO AUTHORIZE A RIGHT OF ENTRY WITH HEADWATERS DEVELOPMENT FOR OUTLOT A, COUNTRY CLUB MANOR FOR THE PURPOSE OF PERFORMING SUPPLEMENTAL PHASE II ENVIRONMENTAL STUDY TASKS. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 7. Consideration of authorizing a Short -Term Rental Agreement or a Right of Entry with Deephaven Development for Block 52 development site related to Phase II Environmental Study and Asbestos -Regulated (Hazardous) Materials Removal - Mitigation and Structure Demolition preparation activities Mr. Thares provided an overview of the agenda item to the EDA and the public. This right of entry would allow the developer's consulting team to begin Phase II ESA work on the Block 52 redevelopment site. Mr. Johnson asked if the costs of the study and/or the work to be done is attributable towards the EDA. Mr. Thares clarified that the cost of the services will be included in the final agreement language for the EDA to support. Mark Buchholz of Deephaven Development addressed the EDA and the public. It was noted that Braun Intertec provided the lowest bid with the quickest turnaround time to maintain the same timeline that the EDA and the developer had been working towards. HALI SITTIG MOVED TO AUTHORIZE A RIGHT OF ENTRY AND/OR A SHORT-TERM RENTAL AGREEMENT WITH DEEPHAVEN DEVELOPMENT FOR THE EDA OWNED PROPERTIES AND BUILDINGS IN BLOCK 52 FOR THE PURPOSE OF PERFORMING A PHASE II ENVIRONMENTAL STUDY AND/OR HAZARDOUS REGULATED MATERIAL ABATEMENT WORK TASKS. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 8. Economic Development Director's Report Mr. Thares provided and overview of the agenda item to the EDA and the public. OLLIE KORPCHAK-WHITE MOVED TO RECESS THE REGULAR MEETING OF THE MONTICELLO EDA AND ENTER INTO A CLOSED MEETING TO DISCUSS NUMBER 9 OF THE AGENDA. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 9. Closed Meeting — Consideration of Offers or Counteroffers for the Purchase or Sale of Real Property Pursuant to Minnesota Statute 13D.05, Subdivision 3c 3 Properties PID #: 155194000010, 155249001010 10. Adjourn The regular meeting of the Monticello EDA was adjourned following their closed meeting discussion. MINUTES WORKSHOP MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, August 10, 2022 — 5:00 p.m. Academy Room, Monticello Community Center Members Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Tracy Hinz, 011ie Koropchak-White, Hali Sittig and Councilmembers Lloyd Hilgart and Jim Davidson Staff Present: Executive Director Jim Thares, Angela Schumann, and Hayden Stensgard 1. Call to Order President Steve Johnson called the workshop meeting of the Monticello EDA to order at 5:05 p.m. 2. Roll Call Mr. Johnson called the roll. 3. Discussion of Facade Improvement Grant Program Proposal — Cornerstone Cafe in Overall Context of Facade Improvement Grant Program Guidelines Executive Director Jim Thares provided an overview of the agenda item to the EDA and the public. Brought to City staff by a property owner in the downtown area, requested a rereview of the Facade Improvement Grant Program. The inquiry came from the owners of the Cornerstone Cafe building at 154 West Broadway. The request is related to the large amount of the building that aligns public streets that would be considered eligible as part of the improvement program. Greg Ashfeld, owner of 154 W Broadway, addressed the EDA and the public. Mr. Ashfeld noted that the amount of improvements on the large space eligible far exceeds the allotted amount for the two sides of the building, and entertained the idea that recalculating the amount of funds given so it would be based off square footage and not number of sides. Mr. Thares reminded the EDA that they have allocated a total of $250,000 dollars to the program, and currently $200,000 dollars remains for the program at this time. It was also noted the EDA recently expanded the eligibility area to include the buildings to remain on Block 52 following the redevelopment project. Community Development Director Angela Schumann noted that City staff recognized the difficulty business owners downtown have had in getting bids towards the work requested through this program. Though the need for multiple bids has been considered a necessity in the application process due to the EDA's responsibility in the public funds that are provided through the program. The EDA recommended that Mr. Ashfeld get updated project renderings related to the work that would be requested, as well as work towards submitting a new program application for the EDA to review, to be able to readdress these noted concerns in the Spring of 2023. 4. Summary Review of Block 52 Development Terms and Funding Structure and Financial Assistance Mr. Thares provided an overview of the agenda item to the EDA and the public. 5. Adjournment TRACY HINZ MOVED TO ADJOURN THE WORKSHOP MEETING OF THE MONTICELLO EDA. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. MEETING ADJOURNED AT 6:00 P.M. MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, August 10th, 2022 — 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Tracy Hinz, 011ie Koropchak-White, Hali Sittig and Councilmembers Lloyd Hilgart and Jim Davidson Staff Present: Executive Director Jim Thares, Angela Schumann, Hayden Stensgard 1. Call to Order President Steve Johnson called the regular meeting of the Monticello EDA to order at 6:00 p.m. 2. Roll Call Mr. Johnson called the roll. 3. Consideration of additional agenda items None 4. Consent Agenda a. Consideration of Approving Regular Meeting Minutes —June 8, 2022 b. Consideration of Approving Payment of Bills c. Consideration of Authorizing a Donation to the Initiative Foundation for use in Community Economic Development Programs in the amount of $2,390 from the 2023 EDA General Fund d. Consideration of Approving Funding for 2022 IEDC Manufacturers' Recognition Event in the amount of $1.150 e. Consider arwroving an Amendment to 2022 Pooled TIF Allocation Plan (05-25- 22 LLOYD HILGART MOVED TO APPROVE THE CONSENT AGENDA. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. Regular Agenda 5. PUBLIC HEARING (CONTINUED) - EDA Land Sale and Business Subsidv — Sale of Lot 2 Block 1, First Addition, 65,800 square feet +/- to Deephaven Development for a Mixed - Use Residential -Commercial Redevelopment Proposal and in connection with TIF Assistance supporting Deephaven Development's Block 52 Redevelopment proposal; and Consideration of Adopting Resolution No. 2022-18 Authorizing a Purchase and Development Contract containine a Grant and Business Subsidv Aereement with Deephaven Development for Lot 2, Block 1, Block 52 First Addition, in the amount of $1.00 related to a proposed Mixed -Use Commercial -Residential Development in connection with and supported by Redevelopment TIF District No. 1-45 Mr. Johnson noted that this public hearing was a continuation and entertained questions from the EDA. Mr. Johnson opened the public hearing portion of the agenda item. Executive Director Jim Thares provided an overview of the agenda item to the EDA and the public. A continued public hearing from the EDA's July 13, 2022 regular meeting, related to the EDA selling land to Deephaven Development for the Block 52 redevelopment project. It was also noted that with the financial assistance the EDA provided for this project, the developers are tasked with creating 45 full-time equivalent jobs over a certain period. Brendan Muldoon, of Property Resources Group, addressed the EDA and the public. Mr. Muldoon noted that he and the development team were ready to proceed with the project. TRACY HINZ MOVED TO ADOPT RESOLUTION NO. 2022-18 AUTHORIZING A PURCHASE AND REDEVELOPMENT AGREEMENT CONTAINING A GRANT AND BUSINESS SUBSIDY AGREEMENT WITH DEEPHAVEN DEVELOPMENT FOR THE CONVEYANCE OF LOT 2, BLOCK 1, BLOCK 52 FIRST ADDITION, IN THE AMOUNT OF $1.00 RELATED TO A PROPOSED MIXED -USE COMMERCIAL -RESIDENTIAL DEVELOPMENT IN CONNECTION WITH AND SUPPORTED BY REDEVELOPMENT TIF DISTRICT NO. 1-45. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 6. Consideration of Resolution #2022-25 Authorizing the 2023 HRA Special Benefit Property Tax Levy in the Amount of $402,000 and the General Fund Budget in the Amount of $450,000 Mr. Thares provided an overview of the agenda item to the EDA and the public. JIM DAVIDSON MOVED TO APPROVE RESOLUTION 2022-25 AUTHORIZING THE 2023 SPECIAL BENEFIT HRA PROPERTY TAX LEVY IN THE AMOUNT OF $402,000. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0. 7. WSB Economic Development Assistance Update —Jim Gromberg Mr. Thares introduce economic development consultant Jim Gromberg from WSB & Associates. Jim Gromberg gave a presentation updating on development assistance and potential development routes for the EDA to prepare for in the future. 8. Economic Development Manager's Report Mr. Thares provided an overview of the agenda item to the EDA and the public. 9. Adjourn TRACY HINZ MOVED TO ADJOURN THE REGULAR MEETING OF THE MONTICELLO EDA. JIM DAVIDSON SECONDED THE MOTION. MOTION APPROVED UNANIMOUSLY, 7-0. MEETING ADJOURNED AT 6:42 P.M. MINUTES ECONOMIC DEVELOPMENT AUTHORITY (EDA) Thursday, August 18, 2022 — 7:30 a.m. Academy Room, Monticello Community Center Members Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Tracy Hinz, 011ie Koropchak-White, and Councilmembers Lloyd Hilgart and Jim Davidson Members Absent: Hali Sittig Staff Present: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, and Hayden Stensgard 1. Call to Order President Steve Johnson called the regular meeting of the Monticello Eda to order at 7:35 a.m. 2. Roll Call Mr. Johnson called the roll. 3. Consideration of Resolution No. 2022-26 Modifvine the TIF District No. 1-45 Plan budeet in connection with Deephaven Development's Block 52 Mixed Use Proposal Executive Director Jim Thares provided an overview of the agenda item to the EDA and the public. The modification is related to the "Sources and Uses of Funds" section of the plan. The proposed modification would not alter the TIF Plan activities nor the proposed development in any manner. LLOYD HILGART MOVED TO ADOPT RESOLUTION NO. 2022-26 APPROVING A MODIFICATION OF THE TIF PLAN FOR TIF DISTRICT NO. 1-45 REVISING THE SOURCES AND USES OF FUNDS BUDGET. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0. 4. Consideration of authorizing a Right of Entry with Deephaven Development for the Block 52 development site related to Structure Demolition activities for specific property addresses 103 Pine Street and 112 West River Street. Mr. Thares provided an overview of the agenda item to the EDA and the public. The right of entry with Deephaven Development would allow the developers to begin demolition efforts at the above -noted addresses before the closing of the property would occur. It was noted that the EDA attorneys advised that the EDA wait until closing occurs prior to any demolition happening. The right of entry would help keep the project on a similar timeline. Mark Buchholz, of Deephaven Development, addressed the EDA and the public. LLOYD HILGART MOVED TO AUTHORIZE A RIGHT OF ENTRY WITH DEEPHAVEN DEVELOPMENT FOR THE EDA OWNED PROPERTIES AND BUILDINGS IN BLOCK 52 FOR THE PURPOSE OF STRUCTURE DEMOLITION ACTIVITIES SPECIFICALLY FOR BUILDINGS LOCATED AT 103 PINE STREET AND 112 WEST RIVER STREET. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0. 5. Consideration of EDA Loans Performance Status Update 6. Adjournment Tracy Hinz moved to adjourn the regular meeting of the Monticello EDA. Jim Davidson seconded the motion. Motion carried unanimously, 6-0. Meeting adjourned at 8:20 a.m. EDA Agenda: 10/10/22 4e. Consideration of Approving Payment of Bills (JT) A. REFERENCE AND BACKGROUND: Accounts Payable summary statements listing bills submitted during the previous month are included for review. B. ALTERNATIVE ACTIONS: 1. Motion to approve payment of bills through September 2022. 2. Motion to approve payment of bills through September 2022 with changes as directed by the EDA. C. STAFF RECOMMENDATION: Staff recommends approval of Alternative #1. D. SUPPORTING DATA: A. Accounts Payable Summary Statements Accounts Payable Transactions by Account User: Julie.Cheney Printed: 09/07/2022 - 2:44PM Batch: 00203.09.2022 Account Number Vendor Description CITYMonticello GL Date Check No Amount PO No 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-45 - Block52 Redevelopment - ] 09/13/2022 126062 1,524.00 213-00000-220110 KENNEDYAND GRAVEN CHAR] 21TO01 - Headwaters Townhomes TIF 09/13/2022 126062 1,874.80 213-00000-220110 KENNEDYAND GRAVEN CHAR] 21TO01 -Headwaters Apartments TIF 09/13/2022 126062 503.80 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-44 - Washburn POS Economic I 09/13/2022 126062 390.00 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-46 - WiHa Tools TIF Project - Ji 09/13/2022 126062 1,870.00 Vendor Subtotal for Dept:00000 6,162.60 213-46301-430400 KENNEDYAND GRAVEN CHAR] Project Suburban Expansion Purchase 09/13/2022 126062 2,271.50 213-46301-430400 KENNEDYAND GRAVEN CHAR] Project Suburban Expansion Purchase 09/13/2022 126062 4,383.80 213-46301-430400 KENNEDYAND GRAVEN CHAR] General EDA- July 2022 09/13/2022 126062 506.00 Vendor Subtotal for Dept:46301 7,161.30 213-46301-431990 WSB & ASSOCIATES INC Downtown Redevelopment Project - J 09/13/2022 0 360.50 213-46301-431990 WSB & ASSOCIATES INC 22CO04 - Block 52 Structural Assessir 09/13/2022 0 11,914.00 213-46301-431990 WSB & ASSOCIATES INC 22CO04 - Block 52 Structural Assessir 09/13/2022 0 901.25 Vendor Subtotal for Dept:46301 13,175.75 213-46301-431993 WSB & ASSOCIATES INC 2022 Economic Development Service: 09/13/2022 0 1,933.50 Vendor Subtotal for Dept:46301 1,933.50 213-46301-461500 ALIVE LUTHERAN CHURCH Relocation - Addt'l Moving Expense 09/13/2022 126027 363.00 AP -Transactions by Account (09/07/2022 - 2:44 PM) Page 1 Account Number Vendor Description GL Date Check No Vendor Subtotal for Dept:46301 Subtotal for Fund: 213 Report Total: Amount PO No 363.00 28,796.15 28,796.15 AP -Transactions by Account (09/07/2022 - 2:44 PM) Page 2 Accounts Payable Transactions by Account User: Debbie.Davidson Printed: 09/21/2022 - 12:25PM Batch: 00204.09.2022 Account Number Vendor Description MO: ticello GL Date Check No Amount PO No 213-00000-220110 ECM PUBLISHERS INC TIF 145-ESCROW - Ad#1258202 Sep- 09/27/2022 0 313.82 Vendor Subtotal for Dept:00000 313.82 213-00000-220110 NORTHLAND SECURITIES INC TIF 1-45 - Block 52 - August 2022 09/27/2022 126140 1,075.00 Vendor Subtotal for Dept:00000 1,075.00 213-46522-443989 WRIGHT CO AUDITOR-TREAS TIF 1-22 Excess Tax Increment Returr 09/27/2022 126158 188,360.00 Vendor Subtotal for Dept:46522 188,360.00 Subtotal for Fund: 213 189,748.82 Report Total: 189,748.82 AP -Transactions by Account (09/21/2022 - 12:25 PM) Page 1 Accounts Payable Transactions by Account User: Debbie.Davidson Printed: 09/16/2022 - 12:22PM Batch: 00201.09.2022 Account Number Vendor Description CITYMonticello GL Date Check No Amount PO No 213-46301-438200 CITY OF MONTICELLO 7256-004 - 130 Brdwy- Stormwtr 09/15/2022 0 26.25 213-46301-438200 CITY OF MONTICELLO 7256-007 - 103 Pine St- EDA 09/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-008 - 112 River St. W EDA 09/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-0010 - 101 Broadway W - EDA. 09/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-0011 107 Broadway W - EDA A: 09/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-013 - 113 Bdwy W- EDA 09/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-014 - 121 Bdwy W- EDA 09/15/2022 0 49.59 Vendor Subtotal for Dept:46301 303.34 213-46301-443300 US BANK CORPORATE PMT SYS The Business Journal - Annual Subscr 09/15/2022 0 100.00 Vendor Subtotal for Dept:46301 100.00 213-46301-443990 US BANK CORPORATE PMT SYS Domino's Pizza - EDA Special Meetin 09/15/2022 0 45.39 Vendor Subtotal for Dept:46301 45.39 Subtotal for Fund: 213 448.73 Report Total: 448.73 AP -Transactions by Account (09/16/2022 - 12:22 PM) Page 1 Accounts Payable Transactions by Account CITY F User: Julie.Cheney Printed: 10/06/2022 - 10:06AM 3tjMSo!nti ffo Batch: 00215.09.2022 Account Number Vendor Description GL Date Check No Amount PO No 213-46301-438100 CENTERPOINT ENERGY 6402123338-8 - 112 W River St 09/30/2022 0 32.94 213-46301-438100 CENTERPOINT ENERGY 6402504048-2 - 107 Broadway W 09/30/2022 0 11.09 213-46301-438100 CENTERPOINT ENERGY 6402504046-6 - 101 Broadway W 09/30/2022 0 25.26 213-46301-438100 CENTERPOINT ENERGY 6402832805-8 - 113 Broadway W 09/30/2022 0 25.26 213-46301-438100 CENTERPOINT ENERGY 11688591-4 - 121 Broadway W 09/30/2022 0 25.26 Vendor Subtotal for Dept:46301 119.81 213-46301-438100 XCEL ENERGY 51-13295413-8 - 103 Pine St 09/30/2022 0 159.51 213-46301-438100 XCEL ENERGY 51-0013373403-2 - 101 &107 Bdwy-' 09/30/2022 0 32.50 Vendor Subtotal for Dept:46301 192.01 213-46301-443990 DEMVI LLC Parking Lot Maintenance - Sept 2022 09/30/2022 0 213.86 Vendor Subtotal for Dept:46301 213.86 Subtotal for Fund: 213 525.68 The preceding list of bills payable totaling $219,519.38 was approved for payment. Report Total: 525.68 Date: 10/12/2022 Approved by: Tracy Hinz - Treasurer AP -Transactions by Account (10/06/2022 - 10:06 AM) Page 1 EDA Agenda: 10/12/22 5. Consideration of Resolution No. 2022-29 approving a Master Amendment Agreement to the EDA's $140,000 GMEF Loan Agreement with Sota Car Wash, LLC dba Due North (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution No. 2022-29 approving an amendment of its $140,000 Greater Monticello Enterprise Fund (GMEF) Loan Agreement with Sota Car Wash, LLC dba Due North. Recently, Cor Trust Bank (CTB) requested via email that the EDA consider subordinating its $140,000 loan to an additional $500,000 mortgage loan offered by CTB to Due North to cover additional project development expenditures. At the September 14, 2022, meeting, the EDA authorized entering into the CTB loan subordination document, contingent on Due North establishing an autopay format for its monthly loan installment payments and secondly, that the additional Due North equity partner, Nate Pierson, sign a Personal Guaranty document. After the EDA approved the loan subordination at the September 14, 2022, meeting, the EDA attorney reviewed the CTB document for execution based on the EDA contingencies. Staff was informed that the loan agreement would need to be amended for the auto pay language and with a new Personal Guaranty form for Mr. Pierson. These amendments need to be approved by the EDA. As noted in the attached email trac from CTB, Nate Pierson, is joining the Due North business as an equity partner, strengthening the managerial and financial profile of the business. This situation is positive in that it offers the EDA another guarantor to further back its loan. As a reminder, the EDA approved its $140,000 GMEF loan to Due North in September 2021. After a principal and interest deferral period, Due North started making monthly principal and interest installment payments on the loan in May 2022. The company is current on its monthly payments and the remaining loan balance is now $137,842.49. Due North will be required to complete its first Business Subsidy compliance report, documenting its job creation results, in February 2023. Al. STAFF IMPACT: Staff involved in the loan agreement amendment review and approval process includes the EDA attorney, Economic Development Manager and Community Development Director. A2. BUDGET IMPACT: The budget impact from considering and processing the amended Due North loan agreement is minimal. There may be a modest amount of legal fees incurred related to the Resolution and the amendment documents completed by the EDA attorney. Those fees will be passed onto the borrower. B. ALTERNATIVE ACTIONS: 1. Motion to adopt Resolution No. 2022-29 approving a Master Amendment Agreement to 1 EDA Agenda: 10/12/22 the EDA's $140,000 GMEF Loan to Due North. 2. Motion to table consideration of adopting Resolution No. 2022-29 approving a Master Amendment Agreement to the EDA's $140,000 GMEF Loan to Due North. C. STAFF RECOMMENDATION: Staff recommends Alternative #1. The EDA authorized CTB's loan subordination with specific contingencies at the September 14, 2022, meeting. Following the meeting, the EDA attorney reviewed the CTB loan subordination document and authorized execution by the EDA President. The final related action step in the process is to incorporate the specific contingencies into the loan agreement through a Master Amendment Agreement. The specific contingencies are that Due North must arrange an autopay process for its monthly loan installment payments to the EDA and that the new equity partner in the business, Nate Pierson, must also sign a Personal Guaranty. By requiring, Mr. Pierson to complete a Personal Guarantee, the EDA will have a strengthened security position. Non-compliance of either of these amendment terms by Due North is considered an "event of default" per the language in the Master Amendment Agreement. SUPPORTING DATA: A. EDA Resolution No. 2022-29 B. Master Amendment Agreement C. Personal Guarantee form for Nate Pierson D. Email Trac —CTB, IF and EDA Manager Ua EDA RESOLUTION NO. 2022-29 RESOLUTION APPROVING A MASTER AMENDMENT AGREEMENT AND A GUARANTY AGREEMENT RELATED TO A GMEF LOAN TO RRG HOLDINGS LLC AND SOTA CAR WASH LLC 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 Authority administers its Greater Monticello Enterprise Fund ("GMEF") revolving loan program pursuant to its authority under Minnesota Statutes, Sections 469.090 to 469.1081, as amended (the "EDA Act"), in order to assist businesses in the City of Monticello, Minnesota (the "City"), in financing certain economic development activities that result in the creation of jobs. 1.02. On September 23, 2021, the Authority provided a GMEF loan to RRG Holdings LLC and Sota Car Wash LLC (together, the "Borrower") in the amount of $140,000 (the "Loan"), pursuant to a Loan Agreement, dated September 23, 2021 (the "Loan Agreement"). 1.03. The Borrower applied the proceeds of the Loan to pay a portion of the costs of acquisition of certain property in the City, demolition of an existing structure thereon, and construction of a new car wash facility thereon. 1.04. To secure the Loan, the Borrower executed and delivered to the Authority a Promissory Note, dated September 23, 2021 (the "Promissory Note"), and a Mortgage, dated September 23, 2021, in favor of the Authority (the "Mortgage"). In addition, to secure repayment of the Promissory Note, Cory Kampschroer, Jessica Kampschroer, Ellen Halvorson, and Jason Halvorson, natural persons, made and entered into a Guaranty Agreement, dated September 23, 2021, for the benefit of the Authority (the "Original Guaranty Agreement"). 1.05. The Borrower has requested that the Authority subordinate the Loan to Cortrust Bank NA (the `Lender"). The Board approved the subordination of the Loan and authorized the delivery of a subordination agreement at its meeting on September 13t'. The Lender prepared a subordination agreement (the "Subordination Agreement") which was executed and delivered by the Authority. As a condition of delivering the Subordination Agreement, the Authority required that Nate Pierson, a natural person (the "Additional Guarantor"), be added as a guarantor on the Loan and that the Borrower set up automatic payments for the Loan. 1.06. The Borrower and the Authority desire to enter into a Master Amendment Agreement (the "Master Amendment Agreement"), which amends and supplements the terms of the Loan Agreement, the Promissory Note, and the Original Guaranty Agreement and requires the delivery of the Guaranty Agreement of the Additional Guarantor (the "Additional Guaranty Agreement"). A-1 MN325\46\824928.v1 Section 2. Amendment Documents Authorized. 2.01. The Authority hereby approves the Master Amendment Agreement and the Additional Guaranty Agreement in substantially the forms submitted, together with any related documents necessary in connection therewith (collectively, the "Amendment Documents"), and the President and Executive Director are hereby authorized and directed to execute the Amendment Documents on behalf of the Authority and to carry out, on behalf of the Authority, the Authority's obligations thereunder. The Authority hereby ratifies the execution and delivery of the Subordination Agreement by the Executive Director and the President. 2.02. The approval hereby given to the Amendment Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the Authority and by the President and Executive Director prior to executing said documents; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the President and Executive Director shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of said officers, any of the documents authorized by this resolution to be executed may be executed without further act or authorization of the Board by any duly designated acting official, or by such other officer or officers of the Board as, in the opinion of the Authority's legal counsel, may act in their behalf. Approved this 12th day of October 2022, by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325\46\824928.v1 2 MASTER AMENDMENT AGREEMENT This Master Amendment Agreement (the "Master Amendment Agreement") is made this day of September, 2022, between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota (the "EDA"); RRG HOLDINGS LLC, a Minnesota limited liability company (the "Owner"); and SOTA CAR WASH LLC, a Minnesota limited liability company (the "Operator") (with the Owner, the "Borrower"), and amends and supplements the Loan Agreement, the Promissory Note and the Guaranty Agreement (as those terms are defined herein). RECITALS On September 23, 2021, the EDA provided a loan to the Borrower from the Greater Monticello Enterprise Fund in the amount of $140,000 (the "Loan"), pursuant to a Loan Agreement, dated September 23, 2021 (the "Loan Agreement"). The Borrower applied the proceeds of the Loan to pay a portion of the costs of acquisition of certain property in the City of Monticello, Minnesota, demolition of an existing structure thereon, and construction of a new car wash facility thereon. To secure the Loan, the Borrower executed and delivered to the EDA a Promissory Note, dated September 23, 2021 (the "Promissory Note") and a Mortgage, dated September 23, 2021, in favor of the EDA (the "Mortgage"). In addition, to secure repayment of the Promissory Note, Cory Kampschroer, Jessica Kampschroer, Ellen Halvorson, and Jason Halvorson, natural persons, made and entered into a Guaranty Agreement, dated September 23, 2021, for the benefit of the EDA (the "Original Guaranty Agreement"). The Borrower has requested that the EDA subordinate the Loan to Cortrust Bank NA and as a condition of such subordination, the EDA has required that Nate Pierson, a natural person, (the "Additional Guarantor") be added as a guarantor on the Loan and that the Borrower set up automatic payments for the Loan. In consideration for the subordination of the Loan, the EDA has required that the Borrower enter into this Master Amendment Agreement, which amends and supplements the terms of the Loan Agreement, the Promissory Note, and the Guaranty Agreement and requires the delivery of the Guaranty Agreement of the Additional Guarantor in substantially the form attached hereto as Exhibit A (the "Additional Guaranty"). ACCORDINGLY, to induce the EDA to subordinate its Loan and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Amendments to Loan Agreement. (i) All references to the Guaranty in the Loan Agreement shall be amended to include the Original Guaranty and the Additional Guaranty. (ii) The following Section 2(c) is hereby added to the Loan Agreement: (c) The Owner agrees that all payments due under the Loan shall be automatically deducted from an account maintained by the Owner. Borrower agrees to execute all documents necessary to open such account and authorize the automatic payments therefrom and provide evidence to the Lender that it has set up such payments on or before November 1, 2022. A failure to comply with this provision shall be an Event of Default under the Loan Agreement. Section 2. Amendment to Promissory Note. Paragraph 4 of the Promissory Note is hereby deleted in its entirety and replaced with the following: (4) This Note is given pursuant to the Loan Agreement and secured by a mortgage of even date herewith delivered by Borrower (the "Mortgage") and by personal guaranties of Cory Kampschroer, Jessica Kampschroer, Ellen Halvorson, Jason Halvorson and Nate Pierson (altogether, the "Guaranty"). If any such security is found to be invalid for whatever reason, such invalidity shall constitute an Event of Default hereunder. Section 3. Additional Guaranty Agreement. The Additional Guaranty shall be delivered on the date hereof. The obligations of the Guarantors under the Original Guaranty Agreement and the Additional Guarantor shall be joint and several with the obligations of each other Guarantor, shall be binding upon the heirs and estate of all the Guarantors, and shall survive the death, divorce, or any other change in situation or relationship of the Guarantors. Section 4. Fees and Costs. The Borrower agrees to pay all costs related to the subordination of the Loan, the execution and delivery of this Master Amendment Agreement and any documents executed, delivered, and recorded, if necessary, in connection thereto. Section 5. Mortgage. The Mortgage will unconditionally secure payment to the EDA as set forth herein and in the Promissory Note. Section 6. Notices. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, first class mail, return receipt requested, to the following addresses (or such other addresses as either party may notify the other): To Lender: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director To Guarantor: Cory Kampschroer 682 55' Street NE Buffalo, MN 55313 Jessica Kampschroer 682 55' Street NE Buffalo, MN 55313 Ellen Halvorson 5392 Braddock Avenue NE Buffalo, MN 55313 Jason Halvorson 5392 Braddock Avenue NE Buffalo, MN 55313 Nate Pierson [ADDRESS] MN325\46\824080.v1 2 Section 6. Confirmation of Loan Agreement, Promissory Note and Guaranty Agreement. Unless specifically amended herein, all terms of the Loan Agreement, the Promissory Note and the Guaranty Agreement remain the same, are confirmed as of the date hereof, and are incorporated herein by reference. (The remainder of this page is intentionally left blank.) MN325\46\824080.v1 IN WITNESS WHEREOF, this Master Amendment Agreement has been duly executed and delivered by the proper officers thereunto duly authorized on the date and year first written above. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director (Signature Page of EDA to Master Amendment Agreement) S-1 MN325\46\824080.v1 This Master Amendment Agreement has been duly executed and delivered by the Borrower on the date and year first written above. OWNER: RRG HOLDINGS LLC Lo Its OPERATOR: SOTA CAR WASH LLC Lo Its (Signature Page of Borrower to Master Amendment Agreement) S-2 MN325\46\824080.v1 EXHIBIT A ADDITIONAL GUARANTY S-1 MN325\46\824080.v1 GUARANTY AGREEMENT This Guaranty Agreement is made and entered into this _ day of September, 2022, by Nate Pierson, a natural person (the "Guarantor"), for the benefit of City of Monticello Economic Development Authority ("Lender"), a public body corporate and politic and a political subdivision of the State of Minnesota. WITNESSETH: WHEREAS, Lender provided a loan to RRG Holdings LLC, a Minnesota limited liability company (the "Owner") from the Greater Monticello Enterprise Fund in the amount of $140,000 (the "Loan"), pursuant to a Loan Agreement between Lender, Owner and Sota Car Wash LLC, a Minnesota limited liability company (the "Operator") (with Owner, the "Borrower"), dated September 23, 2021 (the "Loan Agreement"); and WHEREAS, Owner applied the proceeds of the Loan to finance a portion of the costs of acquisition of property located in the City of Monticello, Minnesota, demolition of an existing structure thereon, and construction of a new car wash facility thereto; and WHEREAS, to secure the Loan, Owner executed and delivered to Lender a Promissory Note, dated September 23, 2021 (the "Note") and a Mortgage, dated September 23, 2021, in favor of Lender (the "Mortgage"); and WHEREAS, in addition, to secure repayment of the Note, Cory Kampschroer, Jessica Kampschroer, Ellen Halvorson, and Jason Halvorson, natural persons, made and entered into a Guaranty Agreement, dated September 23, 2021 (the "Original Guaranty"), for the benefit of Lender; and WHEREAS, pursuant to the Master Amendment Agreement, dated this date hereof, the Borrower requested that the Guarantor be added as an additional guarantor on the Loan and as such Lender agreed to amend the financing terms of the Loan and accept this guaranty agreement (this "Guaranty") by the Guarantor; and WHEREAS, the Guarantor will receive a direct financial benefit from the Loan pursuant to the Note. NOW, THEREFORE, Guarantor hereby covenants and agrees with Lender, for the benefit of all who at any time become holders of the Note, as follows: Section 1.1. Guarantor hereby unconditionally guarantees to Lender for the benefit of the Holder (as defined in the Note) from time to time of the Note: (a) the full and prompt payment of the principal of the Note when and as the same shall become due, whether at the stated maturity thereof, by acceleration or otherwise; (b) the full and prompt payment of any interest on the Note when and as the same shall become due; and (c) any other amounts due to Lender under the Loan Agreement or the Note. All payments shall be paid in lawful money of the United States of America. Each and every default in payment of the principal of or interest on the Note shall give rise to a separate cause 1 of action hereunder, and separate suits may be brought hereunder as each cause of action arises. Section 1.2. The obligations of Guarantor under this Guaranty shall be absolute and unconditional and shall remain in full force and effect until the entire principal of and interest on the Note shall have been paid, and such obligations shall not be affected, modified, or impaired upon the happening from time to time of any event, including, without limitation, any of the following: a. The compromise, settlement, or release of less than all of the obligations, covenants, or agreements of Owner under the Note; b. The failure to give notice to any person of the occurrence of an event of default under the terms and provisions of this Guaranty or the Note executed by Owner: C. The extension of the time for payment of principal of or interest on the Note or under this Guaranty; d. Any failure, omission, delay, or lack on the part of Lender to enforce, assert or exercise any right, power, or remedy conferred on Lender in this Guaranty or other instruments executed and delivered in connection with the loan contemplated thereby, or any other act or acts on the part of Lender or any of the holders from time to time of the Note; e. The default or failure of Guarantor to perform any of the obligations set forth in this Guaranty. Section 1.3. No set-off, counterclaim, reduction, or diminution of any obligation, or any defense of any kind or nature that Owner has or may have shall be available hereunder to Guarantor against Lender. Section 1.4. In the event of a default in the payment of principal of the Note when and as the same shall become due, whether at the stated maturity thereof, by acceleration or otherwise, or in the event of a default in the payment of any interest on the Note when and as the same shall become due, or upon the occurrence and continuance of any Event of Default under the Agreement, Lender may proceed hereunder; and Lender, in its sole discretion, shall have the right to proceed first and directly against the Guarantor for the full amount due without proceeding against or exhausting any other remedies it may have as to Owner. Section 1.5. Guarantor hereby expressly waives notice from Lender or the holders from time to time of the Note of acceptance of or any reliance upon this Guaranty. Guarantor agrees to pay all the costs, expenses, and fees, including attorneys' fees, which may be incurred by Lender in enforcing or attempting to enforce this Guaranty whether the same shall be enforced by suit or otherwise. Section 1.6. This Guaranty is entered into by Guarantor with Lender for the benefit of Lender and the holders from time to time of the Note, all of whom shall be entitled to enforce performance and observance of this Guaranty. Section 1.7. Guarantor is duly authorized and empowered to execute, deliver, and perform MN325\46\824565.v2 2 this Agreement and to borrow money from Lender. Section 1.8. The performance or observance of any promise or condition set forth in this Guaranty may be waived, amended, or modified only by a writing signed by Guarantor and Lender. No delay in the exercise of any power, right, or remedy operates as a waiver thereof, nor shall any single or partial exercise of any other power, right, or remedy. Section 1.9. This Guaranty is made and shall be governed in all respects by the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Guaranty shall be heard in the state or federal courts of Minnesota, and all parties to this Guaranty waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 1.10. If any provision or application of this Guaranty is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications that can be given effect, and this Guaranty shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. Section 1.11. All notices required hereunder shall be given by depositing in the U.S. mail, postage prepaid, certified mail, return receipt requested, to the following addresses (or such other addresses as either parry may notify the other): To Lender: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director To Guarantor: Nate Pierson [ADDRESS] Section 1.12. This Guaranty constitutes the complete and exclusive statement of all mutual understandings between the parties with respect to this Guaranty, superseding all prior or contemporaneous proposals, communications, and understandings, whether oral or written, concerning the Guaranty. Nothing contained herein shall effect or impair Lender's rights under the Loan Agreement, the Note, or the Mortgage. Section 1.13. The obligation of the Guarantor under this Guaranty shall be joint and several with the obligations of each other guarantor under the Original Guaranty (collectively, the "Guarantors"), shall be binding upon the heirs and estate of all the Guarantors, and shall survive the death, divorce, or any other change in situation or relationship of the Guarantors. (The remainder of this page is intentionally blank; signatures follow.) MN325\46\824565.v2 IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed as of the date first above written. Nate Pierson [SIGNATURE PAGE FOR GUARANTY] MN325\46\824565.v2 From: - To: Jim Thares Subject: RE: [EXTERNAL]RRG/ Sota Car Wash Date: Wednesday, September 7, 2022 12:39:02 PM Attachments: - If we don't have to go through the concept of support process and can just get the subordination signed, that would be best. We are under a time constraint to get that sign in the ground before freeze up and it takes two months to get here once ordered. From: Jim Thares <Jim.Thares@ci.monticello.mn.us> Sent: Wednesday, September 7, 2022 11:36 AM To: Randy Voeller Dan Bullert Subject: RE: [EXTERNAL]RRG/ Sota Car Wash WARNING: This email originated outside of the CorTrust Bank email system. DO NOT click links or open attachments unless you recognize the sender and you are expecting the message. Hi Randy. This is a very helpful summary. Do you have a Loan subordination form prepped and ready to send over or did you want it run by the EDA as a concept of support first? From my perspective, what CTB is proposing is fine and I am seeing first-hand how the car wash is succeeding and Cory and Jessica's involvement in the community. I don't vote on these matters though. The EDA only meets two times a month (2nd and 4th Wednesdays). This could drag out a bit if you want to have it presented as a concept for support first with formal action at a follow-on meeting. LMK. Thank you. From: Randy Voeller Sent: Wednesday, September 7, 2022 11:24 AM To: Dan Bullert Cc: Jim Thares <Jim.Thares(@ci.monticello.mn.us> Subject: RE: [EXTERNAL]RRG/ Sota Car Wash Thanks Dan The additional costs are primarily for 2 things that were not included in the original package. • A pylon sign for out front • Additional vacuums due to the popularity. • Cory did underestimate some of the construction related costs that are normally included in projects such as interim interest costs; minor bills that pop up during the course of construction which a contingency would cover; some bills that needed paying before the next draw was requested etc. • Lastly, Cory's friend and soon to be additional partner, Nate Pierson, who has successfully built, operated, and sold carwashes, said Cory should have included a developers fee in his construction costs. This fee is $250,000 and is not uncommon with other such projects. This is to compensate the owner/developer for their time (which Cory put in a great deal of) and other hours spent working with the contractor and subs each day of the project to assure the outcome he wanted. Nate is buying into the partnership for a sum of $350K to help capitalize the company. CTB felt that with this infusion of cash, it was more acceptable to allow Cory's request for the developers fee ie; the company is exchanging equity for equity. In discussing with CorTrust management, we agreed to the above on the following conditions: 1. If the borrowers wished to have us consider the additional funding, they would need to pay for a 2nd appraisal and accept whatever that appraisal allowed. In this case, we did not want the bank or the junior lenders to be in any worse LTV position than we were initially. That is the case as the 2nd appraisal came in nearly $600K higher than the first. 2. The new partner I mentioned above, Nate Pierson, become a guarantor on the deal. This has been agreed to. 3. We are going to reduce the amort to 20 years from 25 and increase the rate a bit. This too has been agreed to. In the end, we are picking up an additional guarantor of strength; remaining at the same overall LTV based on the new appraisal; and helping them complete the project as they had desired it to be. They are doing quite well out of the gate and have displayed good initial numbers for the first 4+ months. The car wash is very popular in the community and whenever I go by there, it is busy. Cory and Jessica have done a great job marketing the business and have plans to continue so using all forms of media. CorTrust Bank would like to increase our commitment by the $500K by filing another separate mortgage to save the borrower some costs. I am asking both the City of Monticello and the Initiative Foundation to agree to subordinate their current debt to that of the banks so the bank can continue in a priority position. Please let me know soon as we are trying to move this along. I appreciate your efforts in helping a great new business spring up in our community. Randy From: Dan Bullert Sent: Wednesday, September 7, 2022 8:53 AM To: Randy Voeller Cc: Jim Thares <Jim.Thares(@ci.monticello.mn.us> Subject: RE: [EXTERNAL]RRG/ Sota Car Wash WARNING: This email originated outside of the CorTrust Bank email system. DO NOT click links or open attachments unless you recognize the sender and you are expecting the message. Randy, From a concept perspective, I could support this request/structure. I am curious about the actual additional costs, total project costs, and how much is going back to Cory. Dan Bullert Business Finance Manager Initiative Foundation 405 First Street SE I Little Falls, MN 56345 www.ifound.org From: Randy Voeller Sent: Thursday, September 1, 2022 8:38 AM To: Jim Thares <Jim.Thares(@ci.monticello.mn.us>; Dan Bullert Subject: [EXTERNAL]RRG/ Sota Car Wash Gentlemen Cory requested an additional $500,000 for the project for additional signage, (30ft. electronic pylon sign on highway 25); add'1 vacuums and fees he paid personally during the construction period. CTB feels it is acceptable but only if an updated appraisal supported the new funds. As such, at their own cost, we had the property reappraised in its completed state. The new appraisal came in at $5,460,000 vs the orig. at $4,880,000. Here is how the new structure would look if approved by our executive committee. Current total debt against the property including City & IF = $4,120,000 / $4,880,000 = 84.4% LTV Adding $500K to the first mtg. would bring total debt to $4,620,000 / $5,460,000 = 84.6% LTV As you can see, the value now would result in a virtually unchanged total LTV. The difference is that both the City and IF are behind a larger amount. Does this cause concern or issues with either of you? Please reply and let me know. Thanks Randall Voeller W/Commercial Lending/Branch Manager NMLS #403068 106 East 4th St., Monticello, MN 55362 REFERRALS ARE WELCOMED AND APPRECIATED CAUTION: This email originated from OUTSIDE the Initiative Foundation. Do NOT click on any links or open attachments unless you recognize the sender and know the content is safe. EDA: 10/12/22 6. Consideration of Adopting Resolution No. 2022-30 Authorizing a Purchase Agreement with Powersports Services, LLC and Platinum Technologies, LLC for the acquisition of Lot 1, Block 1, Oakwood Industrial Park, 311 Addition (1.46-acres), located at 9699 Fallon Avenue, in the amount of $300,000 (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution No. 2022-30 authorizing a purchase agreement with Powersports Services, LLC for the acquisition of Lot 1, Block 1, Oakwood Industrial Park, 3rd Addition. The current owner has determined that the subject parcel does not meet its own long-term development needs and has indicated a willingness to sell the lot to the EDA to facilitate a planned warehouse expansion proposal by Washburn Computer Group, 218 Chelsea Road. The purchase price of the 1.46-acre lot is $300,000. Washburn Computer's has stated that this parcel is a crucial component of its proposed facility expansion footprint. The company would like to construct an approximately 43,000 square foot addition onto the south side of its current building and provide truck staging, turning, and loading areas on the Fallon Avenue site. A second phase building addition may also be possible on the site in the future. Washburn's proposal involves a TIF District (1-44) which was established by the City Council and EDA in the spring of 2022 and includes the subject parcel. The expected cost of Washburn's development proposal is approximately $6,700,000 +/-. If the EDA approves the purchase of the 1.46-acre parcel, Washburn will then execute an Option Agreement wherein it would pay the premium to reserve the right to complete the purchase of the site from the EDA and in this process enter into a Purchase and Development Agreement consummating the acquisition at that time. Terms of the Purchase Agreement for the subject parcel are noted below: ✓ Purchase Price = $300,000 ($4.69 per square foot) ✓ Earnest Money deposit = $10,000 ✓ Warranty Deed provided by Seller ✓ Typical Seller Responsibilities -Representations ✓ Typical Buyer Responsibilities -Representations ✓ Typical split of closing costs attributable to each party ✓ Closing = prior to or by November 30, 2022 The parcel is one of the last remaining vacant industrial lots in the city where outside storage is permitted. The 2022 County assessed valuation of the parcel is $191,100 or $3.00 per square foot. While the purchase amount is a nearly 57 percent increase over the taxable market value, the ability to have outside storage on the lot tends to justify the ask price due to limited availability of these sites. If in the future, Washburn determines that it is not in its interest to pursue an expansion proposal, the EDA would EDA: 10/12/22 market the lot to prospective industrial users. In that instance, Washburn would also forfeit the total amount of the premiums (including renewals) paid to the EDA under the Option Agreement. In the acquisition consideration process, the EDA should establish a public purpose for purchasing property. Economic Development and job creation objectives are identified as the public purpose goals in the attached approval resolution (Section 1.04). Washburn currently employs about 80 full time equivalent staff at its facility on Chelsea Road and plans to add approximately 22 additional staff with the expansion project. The land seller has also linked the sale of this site to its own warehouse development proposal that is considering on an EDA owned lot in Otter Creek Business Park. Washburn's development timeline has shifted slightly since the spring of 2022 pushing the project to 2024 or 2025. The seller has indicated to Washburn and the EDA that it wants to sell the property in 2022 and would put it on the market in early 2023 for any buyer if the 2022 sale goal was not achieved. This situation increases the risk that the land may not be available for Washburn when it is ready to pursue its expansion project. Considering this situation, the EDA's purchase of the parcel, if approved comports with its goal of facilitating tax base growth and job creation by reserving the lot for the Washburn expansion proposal. Al. STAFF IMPACT: In house and consultant staff time involved in the tasks related to the proposed purchase of the lot include the Community Development Director, Economic Development Manager, and the EDA attorney. Tasks included drafting -reviewing -revising the purchase agreement along with preparation of the EDA Resolution and staff report and the actual EDA meeting time. No other staff are needed to complete the property purchase work tasks. A2. BUDGET IMPACT: The budget impact from proposed purchase of the 1.46-acre parcel would be a reduction in the EDA General Fund in the amount of the acquisition price and the closing costs, a total of $303,000 +/-. Legal Fees are estimated to be in a range of $2,200 to $2,500 +/-. A3. COMPREHENSIVE PLAN IMPACT: The proposed action is in direct support of two primary Goals within the Economic Development Chapter of the Comprehensive Plan: "A successful business attraction and retention program that attracts new businesses and retains existing businesses." and "A stable and expanding tax base that diversifies the city's economy and creates a sustainable employment to offset the eventual closure of the Xcel Nuclear Generating Plant." Monticello's continued success in retaining its existing industries and fostering their expansion plans is critical to the community's economic vitality. B. ALTERNATIVE ACTIONS: 2 EDA: 10/12/22 1. Motion to approve Resolution No. 2022-30 authorizing a Purchase Agreement with Powersports Services, LLC and Platinum Technologies, LLC for the acquisition of 1.46-acre industrial parcel in the amount of $300,000, contingent on the Planning Commission review for conformity with the Comprehensive Plan. 2. Motion to table consideration of Adopting Resolution No. 2022-30 for further research and/or discussion. C. STAFF RECOMMENDATION: Staff recommends Alternative #1. Purchasing the 1.46-acre parcel is key step in reserving a crucial site for the proposed Washburn warehouse expansion. Washburn will in -turn enter into an Option Agreement (see Item 7 on the EDA Agenda) with the EDA for the parcel allowing a portion of the purchase price to immediately repaid to the EDA. The EDA will recoup additional dollars through the option renewals and potentially all its land costs through the eventual execution of a Purchase and Development Agreement with Washburn. Ultimately, the EDA is addressing a key policy objective in facilitating job creating economic development projects by helping Washburn obtain a development site for its planned expansion proposal. D. SUPPORTING DATA: a. Resolution No. 2022-30 b. Purchase Agreement c. Wright County Beacon Information d. Parcel Aerial Photo e. CRS Marketing Brochure EDA RESOLUTION NO. 2022-30 RESOLUTION APPROVING A PURCHASE AGREEMENT FOR THE ACQUISITION OF A VACANT LAND PARCEL LOCATED AT 9699 FALLON AVENUE BY THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY BE IT RESOLVED BY the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority and Powersports Services, LLC and Platinum Technologies, LLC (the "Seller"), desire to enter into a purchase agreement (the "Purchase Agreement") pursuant to which the Authority will acquire certain property located at 9699 Fallon Avenue (the "Property") in the City of Monticello (the "City") from the Seller for economic development purposes. The Property is described in Exhibit A attached hereto. 1.02. Pursuant to the Purchase Agreement, the Authority will purchase the Property from the Seller for a total purchase price of $300,000 plus the Authority's share of the closing costs. 1.03. Pursuant to Minnesota Statutes, Section 462.356, subd. 2, the Planning Commission of the City will meet on November 1, 2022, to review the proposed acquisition and its conformity to the City's Comprehensive Plan (the "Comprehensive Plan"). 1.04. Subject to the Planning Commission's formal finding, the Authority finds that acquisition of the Property conforms to the Comprehensive Plan and further finds that it will facilitate the economic development of the business park area in the City by allowing the Authority to convey the Property to a private developer for the construction of a warehouse development project. Section 2. Purchase Agreement Approved. 2.01. The Authority hereby approves the Purchase Agreement in substantially the form presented to the Authority, subject to the required finding by the Planning Commission that the acquisition conforms to the Comprehensive Plan, and further subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Purchase Agreement by those officials shall be conclusive evidence of their approval. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority's obligations under the Purchase Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached 1 MN325-48-828364.v1 to the Purchase Agreement, and any other documents necessary to acquire the Property from the Seller, all as described in the Purchase Agreement. Approved this day of , 2022 by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325-48-828364.v1 EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park Yd Addition, County of Wright, State of Minnesota Parcel ID: 15 5249001010 MN325-48-828364.v1 PURCHASE AGREEMENT 9699 Fallon Avenue, Monticello, Minnesota This Purchase Agreement ("Agreement") is made as of this day of October, 2022, by and between Platinum Technologies, LLC, a Minnesota limited liability company ("Seller") and the City of Monticello Economic Development Authority, a public body politic and corporate under the laws of the State of Minnesota ("Buyer"). 1. PROPERTY. Seller is the owner of property located at 9699 Fallon Avenue in the City of Monticello, Minnesota (PID 155249001010), which is legally described on the attached Exhibit A (the "Property"). 2. OFFER/ACCEPTANCE. In consideration of and subject to the terms and provisions of this Agreement, Buyer offers and agrees to purchase, and Seller agrees to sell and hereby grants to Buyer the exclusive right to purchase the Property and any improvements thereon, together with all appurtenances. Personal property is not included in the sale of the Property. 3. PURCHASE PRICE FOR PROPERTY AND TERMS. a. PURCHASE PRICE: The total purchase price for the Property, representing the fair market value of the Property plus any compensation attributable to Seller's relocation benefits pursuant to paragraph 18 hereof, is: Three Hundred Thousand and 00/100ths Dollars ($300,000.00) ("Purchase Price"). b. TERMS: 1. EARNEST MONEY: Earnest money in the amount of Dollars ($ ) (the "Earnest Money") shall be deposited by Buyer into escrow with Old Republic Title Insurance Company ("Title") within 15 business days after this Agreement has been executed by both parties. The Earnest Money is refundable to the extent provided herein. 2. BALANCE DUE SELLER: Buyer agrees to pay the Purchase Price to Seller by check or wire transfer on the Closing Date (defined hereafter) according to the terms of this Agreement. 3. DEED/MARKETABLE TITLE: Subject to performance by Buyer, Seller agrees to execute and deliver to Buyer a Warranty Deed conveying marketable fee simple title to the Property, free and clear of any mortgages, liens or encumbrances other than matters created by or acceptable to Buyer, subject only to the following exceptions: Building and zoning laws, ordinances, state, and federal regulations; ii. Reservation of minerals or mineral rights to the State of 1 MN325-48-827926.v2 Minnesota, if any; and iii. Public utility and drainage easements of record which will not interfere with Buyer's intended use of the Property. 4. DOCUMENTS TO BE DELIVERED AT CLOSING BY SELLER. In addition to the Warranty Deed required at paragraph 3.b.3. above, Seller shall deliver to Buyer at closing: a. An affidavit from Seller sufficient to remove any exception in Buyer's policy of title insurance for mechanics' and materialmens' liens and rights of parties in possession; b. A "bring -down" certificate, certifying that all of the warranties made by Seller in this Agreement remain true as of the Closing Date; C. Affidavit of Seller confirming that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code; d. Well disclosure certification, if required, or, if there is no well on the Property, the Warranty Deed given pursuant to paragraph 3.b.3. above must include the following statement: "The Seller certifies that the Seller does not know of any wells on the described real property;" e. Any notices, certificates, and affidavits regarding any private sewage systems, underground storage tanks, and environmental conditions as may be required by state or federal statutes, rules or regulations; f. A cancellation of the contract for deed that was entered into by Seller for the sale of the Property to Powersports Services LLC; and f. Any other documents reasonably required by Title (as defined in paragraph 6) or Buyer's attorney to evidence that title to the Property is marketable and that Seller has complied with the terms of this Purchase Agreement. 5. CONTINGENCIES. Buyer's obligation to purchase the Property is contingent upon the following: a. Approval of this Purchase Agreement by Buyer's governing body; b. Written findings by the Planning Commission of the City of Monticello that the acquisition of the Property conforms to the City Comprehensive Plan; C. Buyer conducting environmental investigations on the Property and receiving reports that are satisfactory to Buyer; and d. Buyer's determination of marketable title pursuant to paragraph 6 of this 2 MN325-48-827926.v2 Agreement. Buyer shall have 30 days from the date of execution of this Agreement by Buyer and Seller to remove or waive the foregoing contingencies (the "Due Diligence Period"). These contingencies are solely for the benefit of Buyer and may be waived by Buyer. If Buyer or its attorney gives written notice to Seller that all contingencies are duly satisfied or waived, Buyer and Seller shall proceed to close the transaction as contemplated herein. If one or more of the contingencies is not satisfied, or is not satisfied within the Due Diligence Period, and is not waived by Buyer, this Agreement shall thereupon be void at the written option of Buyer, Buyer and Seller shall execute and deliver to each other documentation effecting the termination of this Agreement, and the Earnest Money shall be refunded to Buyer in full. Buyer shall also deliver to Seller copies of all documentation gathered during the Due Diligence Period, including without limitation all survey, environmental or soil tests. 6. TITLE EXAMINATION/CURING TITLE DEFECTS. Buyer will, at Seller's expense, obtain a commitment for title insurance ("Commitment") for the Property from Title. Buyer shall have ten business days after the later of execution in full of this Purchase Agreement or receipt of the Commitment to examine the Commitment and to deliver written objections to title, if any, to Seller, or Buyer's right to do so shall be deemed waived. Seller shall have until the end of the Due Diligence Period (or such later date as the parties may agree upon) to make title marketable, at Seller's cost. In the event that title to the Property cannot be made marketable or is not made marketable by Seller within the Due Diligence Period, then this Agreement may be terminated at the option of Buyer. 7. ENVIRONMENTAL INVESTIGATIONS. Buyer acknowledges that it has been authorized by Seller to enter the Property and conduct environmental investigations of the Property. Seller shall provide to Buyer any environmental reports or information concerning the Property in Seller's possession at the time of execution of this Agreement. Buyer hereby agrees to indemnify, defend, and hold Seller harmless from and against any and all losses, claims, causes of action, liabilities and costs of defense incurred by Seller arising out of the actions of Buyer, its agents, employees, contractors, or invitees in carrying out Buyer's environmental investigations, unless due to the negligence or willful misconduct of Seller or its agents, employees or contractors. 8. CLOSING DATE. The date of closing shall be no later than November 30, 2022, or such earlier date as is mutually agreed by the parties ("Closing Date"). Delivery of all papers and the closing shall be made through escrow with Title, or at such other location as is mutually agreed upon by the parties. All deliveries and notices to Buyer shall be made as provided in Section 16 of this Agreement. 9. POSSESSION/TENANTS. a. Possession. Seller agrees to deliver possession of the Property to Buyer on the Closing Date. b. Tenants. Seller represents there are not any tenants or third parties in possession 3 MN325-48-827926.v2 of the Property. The parties expressly agree and understand that Seller shall not enter into any third -party leases for any portion of the Property on or after the date of this Agreement. The parties agree that any personal property of Seller, remaining on the Property on the Closing Date shall become property of Buyer. 10. SELLER'S WARRANTIES AND REPRESENTATIONS. Seller hereby represents and warrants to Buyer and Seller will represent and warrant to Buyer as of the Closing Date that: a. Sewer and water. Seller represents that to the best of Seller's knowledge, the Property is connected to City sewer and water. b. Mechanics' Liens. Seller warrants that, prior to the closing, Seller shall pay in full all amounts due for labor, materials, machinery, fixtures or tools furnished within the 120 days immediately preceding the closing in connection with construction, alteration or repair of any structure upon or improvement to the Property caused by or resulting from any action of Seller. C. Notices. Seller represents that Seller has not received any notice from any governmental authority as to violation of any law, ordinance, or regulation in connection with the Property. d. Tenants. Seller warrants there are no tenants on the Property. e. Broker Commission. Commercial Real Estate Solutions (CRS) is Seller's broker in this transaction. Buyer is not represented by a broker in this transaction. Seller shall be responsible for paying any commissions or compensation due to Seller's broker as a result of this transaction. Seller warrants that as of the date of this Agreement, that with the exception of its agreement with Commercial Real Estate Solutions (CRS), there is no agreement in effect with any other broker, agent, or representative who shall be entitled to any commission in connection with this transaction. Buyer warrants that as of the date of this agreement, there is no agreement that Buyer has in effect with any broker, agent, or representative who shall be entitled to any commission in connection with this transaction. Each party agrees to indemnify, defend and hold the other party harmless from the claims of any broker, real estate agent or similar party claiming compensation through the indemnifying party. f. Condemnation. Seller has received no notice that there is any pending or, to the actual knowledge of Seller, threatened condemnation or similar proceeding affecting the Property or any portion thereof, and Seller has no actual knowledge that any such action is contemplated. g. Legal Proceedings. There are no legal actions, suits or other legal or administrative proceedings, pending or threatened, that affect the Property or any portion thereof, and Seller has no knowledge that any such action is presently contemplated. 4 MN325-48-827926.v2 h. Legal Capacity. Seller has the legal capacity to enter into this Agreement. Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against Seller within the last year. i. Underground Tanks. To the best of Seller's knowledge, the Property does not contain any underground storage tanks of any size or description. j. Wells. The Seller certifies that the Seller does not know of any wells on the Property. k. Sewage Systems. Seller does not know of any individual sewage treatment systems on or serving the Property, or if any individual sewage treatment systems exist, Seller shall comply with all applicable statutory disclosure requirements regarding such individual sewage treatment systems. Seller's representations and warranties set forth in this paragraph shall be continuing and are deemed to be material to Buyer's execution of this Agreement and Buyer's performance of its obligations hereunder. All such representations and warranties shall be true and correct on or as of the Closing Date with the same force and effect as if made at that time; and all of such representations and warranties shall survive closing and any cancellation or termination of this Agreement, and shall not be affected by any investigation, verification or approval by any part hereto or by anyone on behalf of any party hereto. Seller agrees to defend, indemnify, and hold Buyer harmless for, from and against any loss, costs, damages, expenses, obligations, and attorneys' fees incurred should an assertion, claim, demand, or cause of action be instituted, made, or taken, which is contrary to or inconsistent with the representations or warranties contained herein. 11. BUYER'S ACKNOWLEGEMENT. Buyer acknowledges and agrees that, except as otherwise provided herein, having been given the opportunity to inspect the Property and review available information and documentation affecting the Property, Buyer is relying solely on its own investigation of the Property and review of such information and documentation. Buyer acknowledges and agrees that no representations or statements have been made by Seller in order to induce Buyer to enter into this transaction other than as expressly stated herein, and that Buyer has not relied upon any representations or statements other than as expressly stated herein. Buyer further acknowledges and agrees that, except as expressly provided herein, the sale of the property as provided for herein is made on an "as -is, where is" condition and basis with all faults and conditions (environmental and all other), and that Seller has no obligation to make any remediation, repairs, replacements, or improvements whatsoever. 12. CLOSING COSTS/RECORDING FEES/DEED TAX. At Closing, Seller shall pay: (a) prorated property taxes due and payable in the year of Closing through the Closing Date; (b) any special assessments levied against the Property and due and payable in the year of Closing; (c) the cost of any documents required to clear title or to evidence marketable title, including fees and charges to record such documents; (d) any operating costs of the Property up to the Closing Date; (e) one-half of all closing and escrow fees customarily charged by Title; (f) any transfer or 5 MN325-48-827926.v2 deed taxes due and payable in the year of Closing on and after the Closing Date; (g) Seller's broker's fees; (h) the cost of an initial title commitment and any title search and examination fees; and (i) Seller's legal and accounting fees. Buyer shall pay: (a) the costs of any environmental investigation, inspection, and/or survey costs ordered by Buyer; (b) costs of the title insurance premium and any endorsements; (c) recording fees and charges related to the filing of the Warranty Deed from the Seller; (d) prorated property taxes due and payable in the year of Closing on and after the Closing Date; (e) one-half of all closing and escrow fees customarily charged by Title; and (f) Buyer's legal and accounting fees. 13. INSPECTIONS. From the date of this Agreement to the Closing Date, Buyer, its employees and agents, shall be entitled to enter upon the Property to conduct such surveying, inspections, investigations, soil borings, and testing as Buyer shall elect. Buyer shall also be entitled to a general walkthrough inspection within five days of the Closing Date. Buyer shall immediately repair any damage caused by its inspection activities. 14. INSURANCE; RISK OF LOSS. a. If there is any loss or damage to the Property between the date hereof and the Closing Date, for any reason including fire, vandalism, flood, earthquake or act of God, the risk of loss shall be on Seller. If the Property is destroyed or substantially damaged before the Closing Date, this Agreement shall become null and void, at Buyer's option. At the request of Buyer, Seller agrees to sign a cancellation of Purchase Agreement. b. Following the Closing Date, the Buyer shall procure and maintain property insurance against the Property. Buyer shall assume all risk of damage or destruction to the Property following the Closing Date. 15. DEFAULT/REMEDIES. If Buyer defaults under this Agreement, Seller has the right to terminate this Agreement by giving written notice of such election to Buyer, pursuant to Minnesota Statutes, Section 559.21. Time is of the essence of this Agreement. The termination of this Agreement and retention by Seller of the Earnest Money will be the sole remedy available to Seller for such default by Buyer, and Buyer will not be further liable for damages. If Seller defaults under this Agreement, Buyer shall have the right (i) to terminate this Agreement and receive reimbursement of the Earnest Money, or (ii) to enforce and recover from Seller specific performance of this Agreement. The termination of this Agreement and reimbursement of the Earnest Money or the enforcement and recovery from Seller of specific performance of this Agreement shall be the sole remedies available to Buyer for such default by Seller, and Seller shall not be further liable for damages. 16. RELOCATION BENEFITS; INDEMNIFICATION. Seller acknowledges that in the event that Seller is eligible for relocation assistance and benefits, the Purchase Price includes compensation for any and all relocation assistance and benefits for which Seller may be eligible, including benefits for loss of going concern. The provisions of this paragraph shall survive closing of the transaction contemplated by this Agreement. 6 MN325-48-827926.v2 For purposes of this Agreement, "relocation assistance and benefits" shall have the meanings ascribed to them by the Uniform Relocation Assistance and Real Property Acquisition Policies Act, 42 U.S.C. Sections 4601-4655 (the federal URA) and the regulations implementing the federal URA, 49 C.F.R. Sections 24.1-24.603. 17. NOTICE. Any notice, demand, request, or other communication which may or shall be given or served by the parties, shall be deemed to have been given or served on the date the same is personally served upon one of the following indicated recipients for notices or is deposited in the United States Mail, registered or certified, return receipt requested, postage prepaid and addressed as follows: SELLER: Platinum Technologies, LLC 219 Dundas Road Monticello, MN 55362 Attn: Stephen J. Budd BUYER: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director 18. ENTIRE AGREEMENT. This Agreement, including exhibits attached hereto, and any amendments hereto signed by the parties, shall constitute the entire agreement between Seller and Buyer and supersedes any other written or oral agreements between the parties relating to the Property. This Agreement can be modified only in a writing properly signed on behalf of Seller and Buyer. 19. SURVIVAL. Notwithstanding any other provisions of law or court decision to the contrary, the provisions of this Agreement shall survive closing. 20. BINDING EFFECT. This Agreement binds and benefits the parties and their successors and assigns. 21. ELECTRONIC SIGNATURES; EXECUTION IN COUNTERPARTS. The electronic signature of the parties to this Agreement shall be as valid as an original signature of such party and shall be effective to bind the parties hereto. For purposes hereof, (i) "electronic signature" means a manually signed original signature that is then transmitted by electronic means; and (ii) "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a portable document format ("pdf ') or other replicating image attached to an electronic mail or internet message. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. (The remainder of this page is intentionally left blank) 7 MN325-48-827926.v2 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date and year above. Buyer: Seller: City of Monticello Economic Development Platinum Technologies, LLC Authority M. Its: Vice President Its: Executive Director By: _ [Name] [Title] 8 MN325-48-827926.v2 EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park 3rd Addition, County of Wright, State of Minnesota Parcel ID: 155249001010 A-1 MN325-48-827926.v2 10/6/22, 1:21 PM Beacon - Wright County, MN - Report: 155249001010 0,,Beacon T V Wright County, MN Summary Parcel ID 155249001010 Property Address Sec/Twp/Rng 14-121-025 Brief Tax Description Sect-14 Twp-121 Range-025 OAKWOOD IN PARK 3RD ADDN Lot-001 Block-001 (Note: Not to be used on legal documents) Deeded Acres 0.00 Class 234 - (NON-HSTD) INDS LAND & BLDGS District (1101)1101 CITY OF MONTICELLO 882 H School District 0882 Creation Date 08/30/2018 Note: Class refers to Assessor's Classification Used For Property Tax Purposes Owner Primary Taxpayer Powersports Services LLC 15608 County Road 7 NW Clearwater, MN 55320 Fee Owner Platinum Technologies LLC 525 Progress Rd Waite Park, MN 56387 GIS Acreage Parcel: 155249001010 Acres:1.46 Acres USAB:1.46 Acres WATE: 0.00 Acres ROW: 0.00 Sq Ft: 63,708.43 Land Unit Eff Seq Description Dim 1 Dim 2 Dim 3 Units UT Price Adj 1 Adj 2 Adj 3 Adj 4 Rate Div % Value 1 INDUSTRIAL PARK A 0 0 0 43,560.000 SF 3.000 1.00 1.00 1.00 1.00 3.000 1.000 130,680 2 INDUSTRIAL PARK A 0 0 0 20,148.000 SF 3.000 1.00 1.00 1.00 1.00 3.000 1.000 60,444 Total 63,708.000 191,124 Sales Multi Parcel IN Q Sale Date Buyer Seller Sale Price Adj Price eCRV N CD U 08/09/2018 POWERSPORTS SERVICES, LLC PLATINUM TECHNOLOGIES, LLC $195,000 $195,000 852147 Recent Sales In Area Sale date range: From: 10/06/2019 To: 10/06/2022 Sales by Neighborhood Sales by Subdivision 1500 Feet v :-ales by Distance https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155249001010 1/3 10/6/22, 1:21 PM Beacon - Wright County, MN - Report: 155249001010 Transfer History Grantor Grantee Recorded Date Doc Type Doc No PLATINUM TECHNOLOGIES LLC POWERSPORTS SERVICES LLC 8/15/2018 CFD 1377281 PLATINUM TECHNOLOGIES LLC OAKWOOD INDUSTRIAL PARK THIRD ADDITION 8/8/2018 PLT 1376716 Note: Transfer History data is from LandLink beginning 01/01/2003. Valuation 2022 Assessment 2021 Assessment 2020 Assessment 2019 Assessment 2018 Assessment + Estimated Land Value $191,100 $159,300 $144,200 $144,200 $111,500 + Estimated Building Value $0 $0 $0 $0 $0 + Estimated Machinery Value $0 $0 $0 $0 $0 = Total Estimated Market Value $191,100 $159,300 $144,200 $144,200 $111,500 Taxation 2022 Payable 2021 Payable 2020 Payable 2019 Payable Estimated Market Value $159,300 $144,200 $144,200 $111,500 - Excluded Value $0 $0 $0 $0 - Homestead Exclusion $0 $0 $0 $0 = Taxable Market Value $159,300 $144,200 $144,200 $111,500 Net Taxes Due $2,988.00 $2,594.00 $2,626.00 $1,936.00 + Special Assessments $0.00 $0.00 $0.00 $0.00 = Total Taxes Due $2,988.00 $2,594.00 $2,626.00 $1,936.00 % Change 15.19% -122% 35.64% 0.00% Taxation (Preliminary 2023 Taxes Payable) 2023 Proposed 2022 Payable Estimated Market Value $191,100 $159,300 - Excluded Value $0 $0 - Homestead Exclusion $0 $0 = Taxable Market Value $159,300 Net Taxes Due $2,988.00 + Special Assessments $0.00 = Total Taxes Due $2,988.00 % Change 0.00% 0.00% Taxes and Special Assessments Payable in 2022 are preliminary. Taxes Paid Receipt # Receipt Print Date Bill Pay Year Amt Adj Amt Write Off Amt Charge Amt Payment 1777330 5/16/2022 2022 $0.00 $0.00 $0.00 ($1,494.00) 1742930 12/8/2021 2021 $0.00 $0.00 $116.73 ($1,413.73) 1709383 5/20/2021 2021 $0.00 $0.00 $51.88 ($1,348.88) 1671461 12/21/2020 2020 $0.00 $0.00 $275.73 ($2,901.73) 1595778 1/29/2020 2019 $0.00 $0.00 $117.72 ($1,125.08) 1555296 5/24/2019 2019 $0.00 $0.00 $38.72 ($987.36) https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155249001010 2/3 10/6/22, 1:21 PM Map Beacon - Wright County, MN - Report: 155249001010 No data available for the following modules: Land GA/RP, Buildings, Extra Features, Photos, Sketches. The ii)f orniation provided an this site N Wended for referswe purposes ordy. The infor rnat ion is not suitable for legal, engineering, or T-)­,,r,­r! !,: siwveying purposes. Wrig ht County does not guarantee the accuracy of the informatOn contairied herein. 44.1 Schneider User Privacy Policy GEOSPAT IAL GDPR Privacy Notice Last Data Upload: 10/6/2022,7:18:26 AM Vesion MR https://beacon.schneidercorp.com/Application.aspx?ApplD=l 87&LayerlD=2505&PageTypelD=4&PagelD=1 31 O&KeyValue=155249001 010 13 Beacon" Wright County, MN Overview Legend Roads --- CSAHC L — CTYCL — MUNICL — PRIVATECL — TWPCL Highways �- Interstate --- State Hwy -- US Hwy City/Township Limits ®c �t Parcels Torrens Parcel ID 155249001010 Alternate ID n/a Owner Address POWERSPORTS SERVICES LLC Sec/Twp/Rng 14-121-025 Class 234- INDS LAND & BLDGS 15608 COUNTY ROAD 7 NW Property Address Acreage n/a CLEARWATER, MN 55320 District 1101 CITY OF MONTICELLO 882 H Brief Tax Description Sect-14Twp-121 Range-025 OAKWOOD IND PARK 3RD ADDN Lot-001 Block-001 (Note: Not to be used on legal documents) Date created:10/6/2022 Last Data Uploaded: 10/6/2022 8:18:26 AM Developed by" Schneider GEOSAATIAL INFORMATION * Sale Price $300,000.00 * Lot is 1.5 Acres * Post Frame Building Allowed * Outdoor Storage Allowed with CUP * Wright County * PID 155-249-001010 2021 Taxes $2,594.00 * Zoned: 1-2 Industrial District * Businesses in Area Include: Dakota Supply Group, Washburn, Fleet Farm, UMC, Copperhead Industries, WSI Industries, McDonald's, Dairy Queen Grill & Chill, Pizza Ranch, Hoglund Bus Co., Holiday Station, General Rental, Best Western and more... MONTICELLO t.'' �k znifi Rnrr ,ry FO 1A?4kc 'AndaYer ,� Coon Rap: d r ! ej CIO, rt�i kiq Park • 1 r -+ Bearke Ply nxw1h x� � wauxto#4n w f:rn Minneapolis I Maplewood �• . r , FCIInAi r r . wiivr r Iilver untie Bloom {nglain Heighis Contact: WAYNE ELAM (763) 229-4982 WElam@crs-mn.com For Sale Industrial Land � �Fallon Ave, Monticello 55362 COMMERCIAL REALTY SOLUTIONS -wit NZr R :Si.. .tee - -♦ T` _ --• y, yam. _ G , .+ .. SITE - f "'' r '6 M I,,I 1Z",1:X,,Iv 0 M 6)� _ t t N't4• T, t ' p .. AL dUNOA tl W 3 Highway 55 West, Buffalo, MN 55313-4320 1 763-682-2400 1 info@crs-mn.com EDA: 10/12/22 7. Consideration of Adopting Resolution No. 2022-31 Authorizing an Option Agreement with Washburn Computer Group, LLC for Lot 1, Block 1, Oakwood Industrial Park, 3rd Addition, (1.46-acres) located at 9699 Fallon Avenue (1T) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution No. 2022-31 authorizing an Option Agreement with Washburn Computer Group, LLC for vacant 1.46-acre industrial parcel described as Lot 1, Block 1, Oakwood Industrial Park, 3rd Addition. If the EDA authorizes the acquisition of the subject parcel under consideration in Item 6 on the agenda, it would then be able to consider approving the proposed Option Agreement with Washburn for the purpose of securing the site for a planned warehouse expansion. Washburn Computer's has stated that this parcel is a crucial component of its proposed facility expansion footprint. The company would like to construct an approximately 43,000 square foot addition onto the south side of its current 33,000 square foot building and provide truck staging, turning, and loading areas on the Fallon Avenue site. A second phase building addition may also be possible on the site in the future. Washburn's proposal involves a TIF District (1-44) which was established by the City Council and EDA in the spring of 2022 and includes the subject parcel. Washburn's expansion development timeline has shifted slightly since the spring of 2022 pushing the project to 2024 or 2025. The EDA's purchase of the parcel and subsequent Option Agreement with Washburn, if approved, comports with its goal of facilitating tax base growth and job creation by reserving the lot for the Washburn expansion proposal. The terms of the Option Agreement for the subject parcel are noted below. ✓ Option Price or Premium = $55,000 ✓ Option Renewal Periods = 2 at 12 months each (total of 24-months) ✓ Option Renewal Price or Premium = $55,000 each ($110,000 for 2 renewals) ✓ Purchase and Development Agreement required at time of Buyer decision to exercise Option to purchase the parcel ✓ Land Purchase Price = $300,000 ($4.69 per square foot) ✓ Option Price or Premium Credits applied to purchase price = Yes, dollar for dollar ✓ Right of Entry granted to buyer for site investigation and study ✓ Seller to Buyer Transfer Deed = Quit Claim Deed ✓ Typical Seller Responsibilities -Representations ✓ Typical Buyer Responsibilities -Representations ✓ Typical split of closing costs attributable to each party This parcel is one of the last remaining vacant industrial lots in the city where outside storage is permitted. The 2022 County assessed valuation of the parcel is $191,100 or $3.00 per square foot. While the purchase amount is a nearly 57 percent increase over EDA: 10/12/22 the taxable market value, the ability to have outside storage on the lot tends to justify the ask price due to limited availability of these sites. If in the future, Washburn determines that it is not in its interest to pursue an expansion proposal, the EDA would market the lot to prospective industrial users. In that instance, per the Option Agreement, Washburn would also forfeit the total amount of the premiums (including renewals) paid to the EDA. Al. STAFF IMPACT: In house and consultant staff time involved in the tasks related to the proposed Option Agreement include the Community Development Director, Economic Development Manager, and the EDA attorney. Tasks included drafting -reviewing -revising the Option Agreement along with preparation of the EDA Resolution and staff report and the actual EDA meeting time. No other staff are needed to complete the property purchase work tasks. A2. BUDGET IMPACT: The budget impact from proposed Option Agreement related to the 1.46-acre parcel would result in an immediate increase in the EDA General Fund equal to the amount of the Option Price of $55,000. This would be partial offset of the EDA's acquisition costs of $300,000. Legal fees related to the Option Agreement are estimated to be about $850 to $1,000 +/-. Those fees will be recouped at the time Washburn enters into a Purchase and Development Contract for the site. A3. COMPREHENSIVE PLAN IMPACT: The proposed action is in direct support of two primary Goals within the Economic Development Chapter of the Comprehensive Plan: "A successful business attraction and retention program that attracts new businesses and retains existing businesses." and "A stable and expanding tax base that diversifies the city's economy and creates a sustainable employment to offset the eventual closure of the Xcel Nuclear Generating Plant." Monticello's continued success in retaining its existing industries and fostering their expansion plans is critical to the community's economic vitality. B. ALTERNATIVE ACTIONS: 1. Motion to approve Resolution No. 2022-31 authorizing an Option Agreement with Washburn Computer Group, LLC for a 1.46-acre industrial parcel located at 9699 Fallon Avenue in the amount of $55,000 Option Premium and a purchase price of $300,000. 2. Motion to table consideration of Adopting Resolution No. 2022-31 for further research and/or discussion. C. STAFF RECOMMENDATION: Staff recommends Alternative 1. Entering into an Option Agreement with Washburn Computer Group for the 1.46-acre parcel is key step in reserving a crucial site for Washburn warehouse expansion proposal. By entering into the Option Agreement, the 2 EDA: 10/12/22 EDA immediately recoups a portion of its land acquisition costs for the site while Washburn gains needed time to complete its plans and arrange the financing for its $6,700,000 +/- development. If Washburn decides to not proceed with the development, it will forfeit the Option Price payment of $55,000 plus any renewal premiums (potentially $55,000 to $110,000) paid to the EDA. Ultimately, the EDA is addressing a key policy objective in facilitating an economic development project with job creation and tax base increase impacts by helping Washburn through the Option Agreement. D. SUPPORTING DATA: a. Resolution No. 2022-31 b. Option Agreement c. Wright County Beacon Information d. Parcel Aerial Photo EDA RESOLUTION NO. 2022-31 RESOLUTION APPROVING AN OPTION AGREEMENT GRANTING WASHBURN COMPUTER THE OPTION TO PURCHASE THE PROPERTY LOCATED AT 9699 FALLON AVENUE BE IT RESOLVED BY the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The Authority and Washburn Computer (the "Buyer"), desire to enter into an option agreement (the "Option Agreement") pursuant to which the Buyer will have the option to purchase certain property located at 9699 Fallon Avenue (the "Property") in the City of Monticello (the "City") that the Authority is in the processing of acquiring from Platinum Technologies, LLC/Powersports Services LLC for economic development purposes. The Property is described in Exhibit A attached hereto. 1.02. Pursuant to the Option Agreement, should the Buyer exercise its option to purchase the Property, it will purchase the Property from the Authority for a total purchase price of $300,000 plus the Buyer's share of the closing costs. The Buyer intends to construct a warehouse development project on the Property. Should the Buyer purchase the Property, the Buyer will also be required to enter into a purchase and development agreement with the Authority to ensure that the Buyer constructs minimum improvements on the Property within one year of the closing of its purchase of the Property. The initial option period is for one year. The Buyer may extend the Option period for up to two subsequent 12-month terms by making an additional option payment to the Authority for each term. Section 2. Option Agreement Approved. 2.01. The Authority hereby approves the Option Agreement in substantially the form presented to the Authority, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director, provided that execution of the Option Agreement by those officials shall be conclusive evidence of their approval. Said Option Agreement shall not be executed by the Authority and its officials until the Authority closes on its purchase of the Property. 2.02. Authority staff and officials are authorized to take all actions necessary to perform the Authority's obligations under the Option Agreement as a whole, including without limitation execution of any documents to which the Authority is a party referenced in or attached to the Option Agreement, all as described in the Option Agreement. MN325-48-828508.v1 Approved this day of , 2022 by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325-48-828508.v1 EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park Yd Addition, County of Wright, State of Minnesota Parcel ID: 15 5249001010 MN325-48-828508.v1 OPTION AGREEMENT THIS OPTION AGREEMENT is made and entered into this day of , 2022 by and between the City of Monticello Economic Development Authority, a public body politic and corporate under the laws of the State of Minnesota (the "Seller") and Washburn Computer, a Minnesota corporation (the "Buyer"). WITNESSETH: WHEREAS, the Seller is the owner of real property located the City of Monticello, Wright County, Minnesota, with an address of 9699 Fallon Avenue being legally described on Exhibit A attached hereto (the "Property"); and WHEREAS, the Buyer wishes to obtain an option to purchase the Property, as part of the Buyer's efforts to develop the Property into a warehouse expansion project; and WHEREAS, the Seller is willing to grant to the Buyer an option to purchase the Property under certain terms and conditions; and NOW, THEREFORE, the Seller and the Buyer have agreed to set forth their agreement regarding the Property pursuant to this Option Agreement, as follows: I. Option. The Seller hereby grants to the Buyer an exclusive right and option to purchase the Property subject to the conditions set forth below (the "Option"). 2. Option Price. The Seller hereby acknowledges receipt from the Buyer of the sum of $55,000.00 which shall constitute the option payment (the "Option Payment") hereunder. The Option Payment shall be non-refundable. In the event that the Buyer purchases the Property pursuant to this Agreement, the Option Payment shall be credited against the Purchase Price payable for the Property as set forth in 1 MN325-48-828379.v1 Section 5 below. In the event the Buyer does not purchase the Property pursuant to this Agreement, the Option Payment shall be retained by the Seller as consideration for granting the Option. 3. Option Period and Extension(s) of the Option Period. 3.1 The period during which the Option may be exercised by the Buyer (the "Option Period") shall commence upon 2022 and shall expire on , 2023. 3.2 The Buyer may extend the Option Period for up to two periods of 12 months each. Each 12-month renewal Option Period shall require an additional $55,000 Option Payment by the Buyer to the Seller. If the Buyer so chooses, the extension of the Option Period may be done as one single 24-month extension (one 24-month Option Period with a $110,000 Option Payment by the Buyer to the Seller). The Option Period extension payments shall be non-refundable. In the event the Buyer purchases the Property pursuant to this Agreement, the Option Payments paid for the Option Period extension(s) shall be credited against the Purchase Price payable for the Property as set forth in Section 5 below. In the even the Buyer does not purchase the Property pursuant to this Agreement, the Option Payments paid for the Option Period extension(s) shall be retained by the Seller as consideration for granting the Option Period extension(s). The Buyer shall give the Seller at least 10 business days' written notice of its intent to extend the Option Period before the expiration of the Option Period and any subsequent extension. 3.2 If the Buyer does not timely exercise the Option or closing does not occur for any reason whatsoever other than the Seller's default hereunder, the Option shall lapse and the Option Payment and any Option Payments paid for Option Period extensions made shall be retained by the Seller as consideration for granting the Option and the Buyer shall have no further rights with respect to the Property. 4. Purchase Price. The total purchase price for the Property shall be $300,000.00 ("Purchase Price"). The Purchase Price, less the Option Payment and payments for the extension of the Option Period previously paid, shall be payable at closing. 5. Exercise of Option. This Option shall be deemed exercised if, within the Option Period, the Buyer gives written notice to the Seller of the Buyer's intent to exercise the Option. If the Buyer exercises the Option and the Seller defaults in any obligations under this Option Agreement, the Buyer shall have the right to enforce specific performance of this Option Agreement. 6. Title Matters. Promptly after exercising the Option, the Buyer shall obtain a commitment for an ALTA owner's title insurance policy. Within 10 business days after receipt of the title commitment, the Buyer shall notify the Seller in 2 MN325-48-828379.v1 writing of any objections to title, or the objections shall be deemed waived. The Seller shall have 30 days after receipt of the objections to cure the objections, during which period the closing will be postponed, if necessary. The Seller shall use all reasonable efforts to cure any objections. If the objections are not cured within such 30-day period, the Buyer will have the option to either of the following: (i) terminate this Option Agreement by giving written notice to the Seller; or (ii) cure the objections at the Buyer's expense. If the Option Agreement is terminated due to the Seller's decision not to cure title objections or failure to cure title objections or any other default of the Seller, the Seller shall repay to the Buyer the Option Payment and any Option Period extension payments previously paid. 7. Due Diligence Investigation. Commencing on the date that the Buyer exercises this Option, the Buyer shall have a due diligence period of 120 days ("Due Diligence Period") to make all such investigations as the Buyer, in its sole and absolute discretion, deems reasonable and necessary in determining the suitability of the Property for the Buyer's needs. All such investigations, reviews and approvals shall be at the Buyer's expense. 7.1. Right of Entry. During the Due Diligence Period, the Buyer shall have the right to enter upon the Property for the purpose of taking soil tests and borings, making surveys and maps and performing investigative work, including environmental testing and assessment, as the Buyer may deem necessary; provided, however, the Buyer shall indemnify, defend and hold the Seller harmless from any mechanics' liens or claims arising out of such investigative work by the Buyer. The Buyer may assign this right to a third party or parties at its sole discretion. 8. Contingencies. 8.1 If the Buyer exercises the Option, the Buyer's obligation to purchase the Property shall be contingent on the following: a. By the end of the Due Diligence Period, the Buyer has determined, in its sole and absolute discretion, that it is satisfied with the results and matters disclosed by the Buyer's investigation of the Property pursuant to Section 7 of this Agreement; b. On or before the closing date, the Buyer has obtained all government approvals required for the Buyer's intended use of the Property; and The condition of title being satisfactory to the Buyer following the Buyer's examination of title as provided in Section 6 of this Agreement. 8.2 The contingencies set forth above are for the benefit of the Buyer and may be waived by the Buyer in the Buyer's sole discretion. Notwithstanding MN325-48-828379.v1 any other provision in this Option Agreement, a waiver of a contingency must be in writing to be effective. At the end of the Due Diligence Period, the Buyer will give written notice to the Seller of the contingencies that have been waived, satisfied, or neither waived nor satisfied. 8.3 If closing does not occur due to the failure of any of the above contingencies, the Seller shall be entitled to retain the Option Payment and any Option Period extension payments as provided in Section 3.2 of this Agreement. 9. Closing. 9.1 Closing Date. The closing shall occur within 30 days after the earlier of the expiration of the Buyer's 120-day Due Diligence Period or the Buyer's written notice that the contingencies set forth in Section 9.1 have been either been waived or satisfied. 9.2. Documents to be Delivered by the Seller. The Seller agrees to deliver to the Buyer the following documents, duly executed as appropriate, at closing: a. A duly recordable quit claim deed for the Property conveying marketable fee simple title to the Property to the Buyer, free and clear of any mortgages, liens, or encumbrances other than matters created by or acceptable to the Buyer. Said quit claim deed shall include a reverter that requires the Buyer to complete minimum improvements on the Property within one year of the date of the closing as they will be defined in a Purchase and Development Agreement to be entered into between the Seller and the Buyer with respect to the development of the Property by the Buyer. b. A Purchase and Development Agreement to be entered into between the Buyer and the Seller that will govern the development of the Property by the Buyer. C. An affidavit from the Seller sufficient to remove any exception in the title policy for mechanics' and materialmens' liens and the rights of parties in possession; d. A completed Minnesota Well Disclosure Certificate, unless the quit claim deed includes the statement "the Seller certifies that the Seller does not know of any wells on the described Property;" e. Any notices, certificates, and affidavits regarding any private sewage systems, underground storage tanks, and environmental conditions as may be required by Minnesota statutes or rules or city ordinances; 4 MN325-48-828379.v1 f. An affidavit of the Seller confirming that the Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code; and g. Customary affidavits, certificates and such other documents as the Buyer reasonably may request to carry out the transactions contemplated under this Option Agreement. 9.3 Closing Costs and Adjustments. Except as otherwise specifically provided in this Option Agreement, the costs of the purchase transaction shall be paid and allocated as follows: a. Title and Related Costs. The Seller shall pay all costs of the preparation of a title commitment, including the search and examination fees, and all recording fees and charges related to the filing of any instrument required to make title marketable. The Buyer shall pay all premiums required for issuance of a title insurance policy and any endorsements. All closing fees charged by the title company and any escrow fees charged by any escrow agent engaged by the parties in connection with this Option Agreement shall be split equally between the Buyer and the Seller. b. Deed Tax and Recording Fees. The Seller shall pay any state deed tax, conservation fee, or other federal, state, or local documentary or revenue stamps or transfer tax with respect to the warranty deed to be delivered by the Seller. The Buyer shall pay recording fees and charges related to the filing of the quit claim deed. C. Tests and Reports. The Buyer shall pay the fees of any surveys, soil tests, environmental assessments, inspection reports, appraisals, or other tests or reports ordered by the Buyer in connection with its purchase of the Property. d. Government Approvals. The Buyer shall pay all costs for obtaining government approvals that may be required in order to close on the Property or as required for the Buyer's intended use of the Property. At the Buyer's request, the Seller will join in any application for any government approval requested by the Buyer. e. Legal and Accounting Fees. Each party shall pay its own legal and accounting fees in connection with this transaction. 10. Real Estate Taxes and Assessments. 10.1 In the event Buyer exercises the Option, the parties shall pay and allocate real estate taxes and special assessments with respect to the Property as follows: 5 MN325-48-828379.v1 a. The Seller shall be responsible for all real estate taxes, including any deferred real estate taxes, penalties, or interest, for the years prior to the year in which closing occurs. The Buyer and the Seller shall prorate as of the date of closing the real estate taxes for the Property that are due and payable in the year of closing. b. The Seller shall pay all special assessments levied against the Property as of the closing date, including special assessments certified for payment with real estate taxes and all deferred assessments. The Buyer shall assume payment of any special assessments that are pending but not levied against the Property as of the closing date. 11. Seller's Representations and Warranties. The Seller hereby represents and warrants to the Buyer, and the Seller will represent and warrant to Buyer as of the closing date that: 11.1 Title. The Seller has good, indefeasible, and marketable fee simple title to the Property. 11.2 Condemnation. There is no pending or, to the actual knowledge of the Seller, threatened condemnation or similar proceeding affecting the Property or any portion thereof, and the Seller has no actual knowledge that any such action is contemplated. 11.3 Defects. The Seller is not aware of any latent or patent defects in the Property, such as sinkholes, weak soils, unrecorded easements, and restrictions. 11.4. Legal Compliance. The Seller has complied with all applicable laws, ordinances, regulations, statutes, rules, and restrictions pertaining to and affecting the Property and the Seller shall continue to comply with such laws, ordinances, regulations, statutes, rules, and restrictions. 11.5 Legal Proceedings. There are no legal actions, suits or other legal or administrative proceedings, pending or threatened, that affect the Property or any portion thereof, and Seller has no knowledge that any such action is presently contemplated. 11.6 Legal Capacity. The Seller has the legal capacity to enter into this Agreement. The Seller has not filed, voluntarily or involuntarily, for bankruptcy relief within the last year under the United States Bankruptcy Code, nor has any petition for bankruptcy or receivership been filed against Seller within the last year. 6 MN325-48-828379.v1 11.7 Leases. There are no third parties in possession of the Property, or any part thereof, and there are no leases, oral or written, affecting the Property or any part thereof. 11.8 Foreign Status. The Seller is not a "foreign person" as such term is defined in the Internal Revenue Code. The Seller's representations and warranties set forth in this Section 11 shall be continuing and are deemed to be material to the Buyer's execution of this Option and the Buyer's performance of its obligations hereunder. All such representations and warranties shall be true and correct on and as of the closing date with the same force and effect as if made at that time; and all of such representations and warranties shall survive the closing and any cancellation or termination of this Agreement, and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf of any party hereto. 12. Assignment of Option. The Buyer shall not assign this Option Agreement to a third party without the written consent of the Seller. 13. Notices. Any notice, demand, request, or other communication which may or shall be given or served by the Seller on the Buyer or by the Buyer on the Seller, shall be deemed have been given or served on the date the same is hand delivered or the date of receipt or the date of delivery if deposited in the United States mail, registered or certified, postage prepaid, and addressed as follows: a. If to the Seller: City of Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director b. If to the Buyer: Washburn Computer 218 Chelsea Road Monticello, MN 55362 Attn: or such other address as either party may give to another party in accordance with this Section 13. 14. Brokers. The Seller represents and warrants to the Buyer that the Seller has not dealt with any brokers in connection with the transaction contemplated by this Option Agreement. The Seller agrees to indemnify, defend, and hold the Buyer harmless from the claims of any broker, real estate agent or similar party claiming through the Seller. The Buyer represents and warrants to the Seller that the Buyer has not dealt with any brokers in connection with the transaction contemplated by this Option Agreement. The Buyer agrees to indemnify, defend, and hold the 7 MN325-48-828379.v1 Seller harmless from the claims of any broker, real estate agent, or similar party claiming through the Buyer. 15. Binding. This Option Agreement binds and benefits the parties and their successors and assigns. 16. No Partnership or Joint Venture. Nothing in this Option Agreement shall be construed or interpreted as creating a partnership or joint venture between the Seller and the Buyer relative to the Property. 17. Entire Agreement. This Option Agreement contains the entire understanding of the parties hereto with respect to the Property and supersedes all prior agreements or understandings between the parties with respect to the same. 18. Cumulative Rights. Except as may otherwise be provided herein, no right or remedy herein conferred on or reserved by either party is intended to be exclusive of any other right or remedy provided by law, but such rights and remedies shall be cumulative in and in addition to every other right or remedy given herein or elsewhere or existing at law, equity or by statute. 19. Amendment and Modification. No amendment, modification or waiver of any condition, provision or term of this Option Agreement shall be valid or have any effect unless made in writing, signed by the party to be bound and specifying with particularly the extent and nature of such amendment, modification, or waiver. Any waiver by either party of any defaults by the other party shall not affect or impair any right arising from any previous or subsequent default. 20. Severability. Each provision, section, sentence, clause, phrase, or word of this Option Agreement is intended to be severable. If any provision, section, sentence, clause, phrase, or word of this Option Agreement is determined to be illegal or invalid for any reason, such illegality or invalidity shall not affect the validity of remainder of this Option Agreement. 21. State Law. This Option Agreement shall be construed and enforced in accordance with the laws of Minnesota. 22. Agreement to Run with the Land. This Agreement shall be recorded by the Buyer at its expense in the records of Wright County. This Agreement shall run with the land and is binding upon the Seller and its successors and assigns. MN325-48-828379.v1 IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement to be executed as of the day and year first written above. SELLER CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By: Its: President By: Its: Executive Director STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2022 by and , the President and the Executive Director, respectively, of the City of Monticello Economic Development Authority, a public body corporate and politic under the laws of the State of Minnesota on behalf of the Authority. Notary Public 9 MN325-48-828379.v1 BUYER WASHBURN COMPUTER Its: STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this _ , 2022, by the Washburn Computer, a Minnesota corporation on behalf of the corporation. Notary Public This instrument was drafted by: Kennedy & Graven, Chartered (SJS) Fifth Street Towers, Suite 700 150 South Fifth Street Minneapolis, MN 55402 (612) 337-9300 day of of 10 MN325-48-828379.v1 EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park 3rd Addition, County of Wright, State of Minnesota Parcel ID: 155249001010 A-1 MN325-48-828379.v1 10/6/22, 1:21 PM Beacon - Wright County, MN - Report: 155249001010 0,,Beacon T V Wright County, MN Summary Parcel ID 155249001010 Property Address Sec/Twp/Rng 14-121-025 Brief Tax Description Sect-14 Twp-121 Range-025 OAKWOOD IN PARK 3RD ADDN Lot-001 Block-001 (Note: Not to be used on legal documents) Deeded Acres 0.00 Class 234 - (NON-HSTD) INDS LAND & BLDGS District (1101)1101 CITY OF MONTICELLO 882 H School District 0882 Creation Date 08/30/2018 Note: Class refers to Assessor's Classification Used For Property Tax Purposes Owner Primary Taxpayer Powersports Services LLC 15608 County Road 7 NW Clearwater, MN 55320 Fee Owner Platinum Technologies LLC 525 Progress Rd Waite Park, MN 56387 GIS Acreage Parcel: 155249001010 Acres:1.46 Acres USAB:1.46 Acres WATE: 0.00 Acres ROW: 0.00 Sq Ft: 63,708.43 Land Unit Eff Seq Description Dim 1 Dim 2 Dim 3 Units UT Price Adj 1 Adj 2 Adj 3 Adj 4 Rate Div % Value 1 INDUSTRIAL PARK A 0 0 0 43,560.000 SF 3.000 1.00 1.00 1.00 1.00 3.000 1.000 130,680 2 INDUSTRIAL PARK A 0 0 0 20,148.000 SF 3.000 1.00 1.00 1.00 1.00 3.000 1.000 60,444 Total 63,708.000 191,124 Sales Multi Parcel IN Q Sale Date Buyer Seller Sale Price Adj Price eCRV N CD U 08/09/2018 POWERSPORTS SERVICES, LLC PLATINUM TECHNOLOGIES, LLC $195,000 $195,000 852147 Recent Sales In Area Sale date range: From: 10/06/2019 To: 10/06/2022 Sales by Neighborhood Sales by Subdivision 1500 Feet v :-ales by Distance https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155249001010 1/3 10/6/22, 1:21 PM Beacon - Wright County, MN - Report: 155249001010 Transfer History Grantor Grantee Recorded Date Doc Type Doc No PLATINUM TECHNOLOGIES LLC POWERSPORTS SERVICES LLC 8/15/2018 CFD 1377281 PLATINUM TECHNOLOGIES LLC OAKWOOD INDUSTRIAL PARK THIRD ADDITION 8/8/2018 PLT 1376716 Note: Transfer History data is from LandLink beginning 01/01/2003. Valuation 2022 Assessment 2021 Assessment 2020 Assessment 2019 Assessment 2018 Assessment + Estimated Land Value $191,100 $159,300 $144,200 $144,200 $111,500 + Estimated Building Value $0 $0 $0 $0 $0 + Estimated Machinery Value $0 $0 $0 $0 $0 = Total Estimated Market Value $191,100 $159,300 $144,200 $144,200 $111,500 Taxation 2022 Payable 2021 Payable 2020 Payable 2019 Payable Estimated Market Value $159,300 $144,200 $144,200 $111,500 - Excluded Value $0 $0 $0 $0 - Homestead Exclusion $0 $0 $0 $0 = Taxable Market Value $159,300 $144,200 $144,200 $111,500 Net Taxes Due $2,988.00 $2,594.00 $2,626.00 $1,936.00 + Special Assessments $0.00 $0.00 $0.00 $0.00 = Total Taxes Due $2,988.00 $2,594.00 $2,626.00 $1,936.00 % Change 15.19% -122% 35.64% 0.00% Taxation (Preliminary 2023 Taxes Payable) 2023 Proposed 2022 Payable Estimated Market Value $191,100 $159,300 - Excluded Value $0 $0 - Homestead Exclusion $0 $0 = Taxable Market Value $159,300 Net Taxes Due $2,988.00 + Special Assessments $0.00 = Total Taxes Due $2,988.00 % Change 0.00% 0.00% Taxes and Special Assessments Payable in 2022 are preliminary. Taxes Paid Receipt # Receipt Print Date Bill Pay Year Amt Adj Amt Write Off Amt Charge Amt Payment 1777330 5/16/2022 2022 $0.00 $0.00 $0.00 ($1,494.00) 1742930 12/8/2021 2021 $0.00 $0.00 $116.73 ($1,413.73) 1709383 5/20/2021 2021 $0.00 $0.00 $51.88 ($1,348.88) 1671461 12/21/2020 2020 $0.00 $0.00 $275.73 ($2,901.73) 1595778 1/29/2020 2019 $0.00 $0.00 $117.72 ($1,125.08) 1555296 5/24/2019 2019 $0.00 $0.00 $38.72 ($987.36) https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155249001010 2/3 10/6/22, 1:21 PM Map Beacon - Wright County, MN - Report: 155249001010 No data available for the following modules: Land GA/RP, Buildings, Extra Features, Photos, Sketches. The ii)f orniation provided an this site N Wended for referswe purposes ordy. The infor rnat ion is not suitable for legal, engineering, or T-)­,,r,­r! !,: siwveying purposes. Wrig ht County does not guarantee the accuracy of the informatOn contairied herein. 44.1 Schneider User Privacy Policy GEOSPAT IAL GDPR Privacy Notice Last Data Upload: 10/6/2022,7:18:26 AM Vesion MR https://beacon.schneidercorp.com/Application.aspx?ApplD=l 87&LayerlD=2505&PageTypelD=4&PagelD=1 31 O&KeyValue=155249001 010 13 Beacon" Wright County, MN Overview Legend Roads --- CSAHC L — CTYCL — MUNICL — PRIVATECL — TWPCL Highways �- Interstate --- State Hwy -- US Hwy City/Township Limits ®c �t Parcels Torrens Parcel ID 155249001010 Alternate ID n/a Owner Address POWERSPORTS SERVICES LLC Sec/Twp/Rng 14-121-025 Class 234- INDS LAND & BLDGS 15608 COUNTY ROAD 7 NW Property Address Acreage n/a CLEARWATER, MN 55320 District 1101 CITY OF MONTICELLO 882 H Brief Tax Description Sect-14Twp-121 Range-025 OAKWOOD IND PARK 3RD ADDN Lot-001 Block-001 (Note: Not to be used on legal documents) Date created:10/6/2022 Last Data Uploaded: 10/6/2022 8:18:26 AM Developed by" Schneider GEOSAATIAL EDA: 10/12/22 8. Consideration of Adopting Resolution No. 2022-32 Authorizing a Preliminary Development Agreement (PDA) with Moon Motor Sales, LLC for EDA owned Lot 1, Block 1, Otter Creek Crossing, 7th Addition, 9.674-acres, located in Otter Creek Business Park (OCBP) for a Warehouse Development Proposal (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution No. 2022-32 authorizing a Preliminary Development Agreement (PDA) with Moon Motor Sales, LLC (Moon Motor) for Lot 1, Block 1, Otter Creek Crossing, 7th Addition for a warehouse development proposal. The 9.674-acre parcel is located at the west end of Dalton Court (cul de sac) in OCBP. Moon Motor has been discussing its goal of identifying a suitable site for a new 40,000 square foot warehouse to service its growing retail dealership operations in the city since early 2022 regarding. The OCBP parcel is a desirable location as it is close to Moon Motor dealership located at 3613 Chelsea Road West. In using a PDA format, both entities are expected to work on tasks to determine if the concept development at the OCBP site is feasible and in the best interest of all parties. Specifically, Moon Motor is expected to complete various critical due diligence tasks such as site layout, architectural plan sets, gathering cost estimates and discussing financing options with lenders. At the same time, the EDA will exclusively reserve the parcel for Moon Motor's potential development as well as review and analyze information and the need for financial assistance. The PDA is non -binding and is considered a precursor to a formal Purchase and Development Contract and identifies that as an end goal by both parties. The PDA term consists of an initial 12-month timeframe with two, 12-month extensions, if needed (total term of 36 months). The EDA most recently used a PDA format process for the UMC facility expansion and for the Block 52 redevelopment. Moon Motor has stated that it needs a sizable warehouse to receive and store its inventory of various motorized sports and utility vehicles. Also, per Moon Motor's description to staff, many of these products are delivered to the dealer only partly assembled, so the final assembly step would be completed at the warehouse facility as well. Moon Motor expects to hire 3 to 5 new employees as part of the development. Key terms of the PDA for the subject parcel are noted below. ✓ Exclusive developer rights to Moon Motor during the 12-month PDA term ✓ PDA Renewal Periods = 2 at 12 months each (total of 24-months) ✓ Pre -cursor to a Purchase and Development Agreement ✓ Developer to complete various due -diligence tasks ✓ EDA to review development information and analyze need for financial assistance to developer ✓ Requires development consistent with TIF-eligible activities EDA: 10/12/22 Al. STAFF IMPACT: In house and consultant staff time involved in the tasks related to the proposed PDA include the Community Development Director, Economic Development Manager, and the EDA attorney. Tasks included drafting -reviewing -revising the PDA along with preparation of the EDA Resolution and staff report and the actual EDA meeting time. No other staff are needed to complete the property purchase work tasks. A2. BUDGET IMPACT: The budget impact from proposed PDA for the 9.764-acre site is relatively modest. Legal fees are projected to be about $1,200 to 1,500 +/-. Those fees will be recouped at the time Moon Motor enters into a Purchase and Development Contract for the site. A3. COMPREHENSIVE PLAN IMPACT: The proposed action is in direct support of two primary Goals within the Economic Development Chapter of the Comprehensive Plan: "A successful business attraction and retention program that attracts new businesses and retains existing businesses." and "A stable and expanding tax base that diversifies the city's economy and creates a sustainable employment to offset the eventual closure of the Xcel Nuclear Generating Plant." Monticello's continued success in retaining its existing industries and fostering their expansion plans is critical to the community's economic vitality. B. ALTERNATIVE ACTIONS: 1. Motion to approve Resolution No. 2022-32 authorizing a PDA with Moon Motor for a 9.764-acre parcel described at Lot 1, Block 1, Otter Creek Crossing, 71n Addition, located in Otter Creek Business Park. 2. Motion to table consideration of Adopting Resolution No. 2022-32 for further research and/or discussion. C. STAFF RECOMMENDATION: Staff recommends Alternative 1. Entering into a PDA with Moon Motor for a 9.764-acre parcel in OCBP is a considered a prudent starting point for the potential 40,000 square foot warehouse development being considered by Moon Motor. The company has been discussing the development concept with City staff since early 2022. Essentially, the PDA allows the EDA to reserve the parcel exclusively for Moon Motor providing it time to complete required due diligence tasks. The EDA also commits to review submitted development information and analyze the various financial assistance options. If Moon Motor eventually proceeds with the purchase of the site from the EDA, it is required to enter into a Purchase and Development Contract specifying the land conveyance and financial assistance terms. In approving the PDA, the EDA is addressing a key policy objective of facilitating economic development processes that may result in new job creation and increase the local tax base. 2 EDA: 10/12/22 D. SUPPORTING DATA: a. Resolution No. 2022-32 b. Preliminary Development Agreement c. Wright County Beacon Information d. Parcel Aerial Photo CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-32 APPROVING PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND MOON MOTOR SALES, INC. BE IT RESOLVED by the Board of Commissioners (the "Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: 1. Background. 1.01. The Authority owns certain property (the "Property") in the City of Monticello, Minnesota (the "City"). 1.02. The Authority and Moon Motor Sales, Inc., a Minnesota corporation, or an entity related thereto or affiliated therewith (the "Developer") have determined to enter into a preliminary development agreement (the "PDA"), providing for the negotiation of a definitive purchase and development agreement that will address (among other things) the sale of the Property by the Authority to the Developer and the construction by the Developer of an approximately 40,000 square foot warehouse and light assembly on the Property. 1.03. The Board has reviewed the PDA, and has determined that it is in the best interests of the Authority to approve and execute the PDA. 2. Approval of PDA. 2.01. The Authority approves the PDA, and authorizes and directs the President and Executive Director to execute the PDA in substantially the form on file, subject to modifications that do not alter the substance of the transaction and are approved by the President and Executive Director, provided that execution of the PDA by such officials will be conclusive evidence of their approval. 2.02. Authority officials and consultants are authorized to take any other actions necessary to carry out the Authority's obligations under the PDA, and to bring a proposed definitive development contract before the Authority. Approved this 12t' day of October, 2022, by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Secretary MN190\175\825215.v1 PRELIMINARY DEVELOPMENT AGREEMENT THIS AGREEMENT, made and entered into this 12t' day of October, 2022, between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of the State of Minnesota ("Authority") and MOON MOTOR SALES, INC., a Minnesota corporation ("Developer"): RECITALS WHEREAS, the Authority owns certain property within the City of Monticello, Minnesota (the "City"), described in Exhibit A attached hereto (the "Property"); and WHEREAS, the Developer has proposed acquiring the Property and constructing an approximately 40,000 square foot warehouse facility thereon (the "Development"); and WHEREAS, the Authority has determined that it is in its best interest that the Developer be designated sole developer of the Property during the term of this Agreement; and WHEREAS, the Authority and the Developer are willing and desirous to undertake the Development if (i) a satisfactory agreement can be reached regarding the Authority's commitment for any public assistance that may be necessary for the Development; (ii) satisfactory mortgage and equity financing, or adequate cash resources for the Development can be secured by the Developer; (iii) the economic feasibility and soundness of the Development can be demonstrated; and (iv) satisfactory resolution of zoning, land use, site design, and engineering issues, and other necessary preconditions have been determined to the satisfaction of the parties; and WHEREAS, the Authority is willing to evaluate the Development and work toward all necessary agreements with the Developer, if the Developer agrees to make the nonrefundable deposit described herein, which is intended, in part, to reimburse the Authority for its costs if the Development is abandoned by Developer or necessary agreements are not reached under the terms of this Agreement. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows: Section 1. Intention of Parties. It is the intention of the parties that this Agreement: (a) documents the present understanding and commitments of the parties; and (b) will lead to negotiation and execution of a mutually satisfactory Purchase and Development Agreement (the "Contract") prior to the termination date of this Agreement. The Contract (together with any other agreements entered into between the parties hereto contemporaneously therewith) when executed, will supersede all obligations of the parties hereunder. Section 2. Outline of Negotiations. Negotiations between the parties shall proceed in an attempt to formulate a definitive Contract based on the following: (a) the Developer's current proposal for the Development together with any changes or modifications required by the Authority; (b) such documentation regarding economic feasibility of the Development as the Authority and the Developer may wish to undertake during the term of this Agreement; and (c) other terms and conditions of this Agreement. The parties agree and understand that negotiations regarding the Contract will proceed as soon as reasonably practicable after the date of this Agreement, as sufficient details for the Development become available. shall: Section 3. Developer's Obligations. During the term of this Agreement, the Developer (a) Submit to the Authority a design proposal to be approved by the Authority showing the location, size, and nature of the proposed Development, including floor layouts, renderings, elevations, and other graphic or written explanations of the Development. The design proposal shall be accompanied by a proposed schedule for the commencement and completion of the Development. (b) Submit a cost estimate for the design and construction of the Development. (c) Submit a time schedule for all phases of the Development. (d) Submit to the Authority the Developer's financing plan showing that the proposed Development is financially feasible, and, to the extent Developer seeks public financial assistance in any form (including reduced land cost, waiver of fees, or tax increment financing), evidence that such assistance is reasonably necessary to make the Development financially feasible. (e) Furnish satisfactory financial data to the Authority evidencing the Developer's ability to undertake the Development. (f) Submit zoning, land use, platting and subdivision applications for the Development, as appropriate. (g) Undertake and obtain such other preliminary economic feasibility studies, income and expense projections, and such other economic information as the Developer may desire to further confirm the economic feasibility and soundness of the Development. (h) Provide any other information that the Authority may request. Section 4. Authority's Obligations. During the term of this Agreement, the Authority agrees to: 2 MN190\175\825108.v2 (a) Proceed to seek all necessary information with regard to the anticipated public costs associated with the Development. (b) Review zoning, planning and subdivision implications of the Development, as appropriate. (c) Analyze the Redeveloper's pro forma and estimate the amount and type of public financial assistance, if any, needed to make the Development feasible and authorized under the laws of the State of Minnesota. Section 5. Contingencies. It is expressly understood that execution and implementation of the Contract shall be subject to: (a) A determination by the City and the Authority, in their sole discretion, that any public financial assistance for the Development is feasible based on the projected sources available, and that financial assistance is warranted based on the Developer's pro forma and any other information provided to the City and Authority. If the use of tax increment financing is considered, a determination by the City and the Authority, in their sole discretion, that the Development meets the requirements of an "economic development district" under Minnesota Statutes, Sections 469.174 through 469.1794, as amended (the "TIF Act"), and specifically, that the Development qualifies as a "economic development district" under Section 469.174, subdivision 12 of the TIF Act. (b) A determination by the Developer that the Development is feasible and in the best interests of the Developer. (c) A determination by the City Council of the City and the Board of Commissioners of the Authority that the Development is in the best interests of the City and the Authority. Section 6. Reimbursement of Costs. In the event that the Developer seeks public financial assistance for the Project, the Developer shall be solely responsible for all costs incurred by the Developer. In addition, the Developer shall reimburse the City and the Authority for Administrative Costs, as hereafter defined. For the purposes of this Agreement, the term "Administrative Costs" means out of pocket costs incurred by the City and the Authority attributable to or incurred in connection with the negotiation and preparation of this Agreement, the Contract, and other documents and agreements in connection with the Development, including without limitation all costs in connection with any planning approvals necessary for the Property and the cost of financial advisors, attorneys, engineering and planning and environmental consultants. Notwithstanding the foregoing, each party shall pay for its own costs incurred in connection with the negotiation and preparation of this Agreement. In order to secure payment of the Administrative Costs, the Developer shall deliver to the Authority cash or a certified check in the amount of $12,000, such delivery to occur upon delivery by the Developer of Developer's application for tax increment assistance. If at any one or more 3 MN190\175\825108.v2 times during the term of this Agreement, the Authority determines that Administrative Costs will exceed $12,000 and that additional security is required, the Authority shall notify the Developer of the amount of such additional security. Within ten (10) calendar days of receipt of this notice, the Developer shall deliver to the Authority the required additional security. The City and the Authority will utilize the funds delivered by the Developer to pay or reimburse themselves for Administrative Costs. Upon termination of this Agreement, the Authority will return to the Developer the funds paid by the Developer to the Authority pursuant to this Section 6, less an amount equal to the Administrative Costs incurred by the City and the Authority through the date of notice of termination. For the purposes of this paragraph, Administrative Costs are considered to be incurred if they have been paid, relate to services performed, or are payable under a contract entered into, on or before the date of the notice of termination. This Section 6 shall survive termination of this Agreement and shall be binding on the Developer regardless of the enforceability of any other provision of this Agreement. Section 7. Designation As Sole Developer of Property. The Authority hereby agrees that for the term of this Agreement it will not: (i) provide or enter into any agreement for the provision of financial assistance to any third party in connection with any proposed development within the Property; and (ii) negotiate or contract with any other party concerning the sale or development of the Property. During such period the Developer shall have the exclusive right to work with the Authority in negotiating a definitive Contract for the Property. The Developer may not assign its rights or obligations under this Agreement to any person or entity without prior written approval by the Authority. Section 8. Term of Agreement. This Agreement is effective for one (1) year from the date hereof. After such date, both parties may mutually agree in writing to extend this Agreement for an additional one (1) year and after that, again for a third and final year. After such date, neither party shall have any obligation hereunder except as expressly set forth to the contrary herein. This Agreement may also be terminated upon ten (10) days written notice by the Authority to the Developer if: (a) an essential precondition to the execution of a definitive Contract cannot be met; or (b) if, in the sole discretion of the Authority, an impasse has been reached in the negotiation or implementation of any material term or condition of this Agreement or the Contract; (c) or the Developer has failed to provide additional funds to pay for Administrative Costs in accordance with Section 6 hereof. 4 MN190\175\825108.v2 Section 9. Remedies. In the event that the Developer, its heirs, successors or assigns, fail to comply with any of the provisions of this Agreement, the Authority may proceed to enforce this Agreement by appropriate legal or equitable proceedings, or other similar proceedings, and the Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including reasonable attorneys' fees. Section 10. Severability. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of the Agreement. Section 11. Amendment and Waiver. In the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. This Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. Section 12. Notice. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered personally: (a) As to the Developer: Moon Motor Sales, Inc. 3613 Chelsea Road W. Monticello, MN 55362 (b) As to the Authority: Monticello Economic Development Authority 505 Walnut Street, Suite 1 Monticello, MN 55362 Attn: Executive Director Section 14. Counterparts. This Agreement may be executed simultaneously in any number of counterparts, all of which shall constitute one and the same instrument. Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise. Section 16. Indemnification. The Developer hereby agrees to protect, defend and hold the Authority, the City and their officers, elected and appointed officials, employees, administrators, commissioners, agents, and representatives harmless from and indemnified against any and all loss, cost, fines, charges, damage and expenses, including, without limitation, reasonable attorney's fees, consultant and expert witness fees, and travel associated therewith, due to claims or demands of any kind whatsoever caused by Developer or arising out of actions of Developer with regard to (i) the development, marketing, sale or leasing of all or any part of the Property, including, without limitation, any claims for any lien imposed by law for services, labor or materials furnished to or for the benefit of the Property, or (ii) any claim by the state of Minnesota or the Minnesota Pollution 5 MN190\175\8251 os.v2 Control Agency or any other person pertaining to the violation of any permits, orders, decrees or demands made by said persons or with regard to the presence of any pollutant, contaminant or hazardous waste on the Property deposited or released by Developer; and (iii) or by reason of the execution of this Agreement or the performance of this Agreement. The Developer, and the Developer's successors or assigns, agree to protect, defend and save the Authority, the City and their members, officers, agents, and employees, harmless from all such claims, demands, damages, and causes of action and the costs, disbursements, and expenses of defending the same, including but not limited to, attorneys fees, consulting engineering services, and other technical, administrative or professional assistance incurred by the Authority and the City as a result of the actions of Developer. This indemnity shall be continuing and shall survive the performance, termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a limitation of or waiver by the Authority or the City of any immunities, defenses, or other limitations on liability to which the Authority is entitled by law, including but not limited to the maximum monetary limits on liability established by Minnesota Statutes, Chapter 466. 0 MN190\175\825108.v2 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be duly affixed hereto, and the Developer has caused this Agreement to be duly executed as of the day and year first above written. MOON MOTOR SALES, INC. By Its: CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Executive Director 7 MN190\175\825108.v2 EXHIBIT A Description of Property The property located in the City of Monticello, Wright County, Minnesota legally described as: Lot 1, Block 1, Otter Creek Crossing 7t' Addition. A-1 MN190\175\825108.v2 10/6/22, 4:44 PM Beacon - Wright County, MN - Report: 155273001010 (%, 1"tv': B e a c o n Wright County, MN Summary Parcel ID 155273001010 Property Address Sec/Twp/Rng 10-121-025 Brief Tax Description Sect-10 Twp-121 Range-025 OTTER CREEK CROSSING 7TH ADDN Lot-001 Block-001 (Note. Not to be used on legal documents) Deeded Acres 0.00 Class 958 - (NON-HSTD) MUNICIPAL PUB -OTHER District (1101)1101 CITY OF MONTICELLO 882 H School District 0882 Creation Date 08/01/2022 Note: Class refers to Assessor's Classification Used For Property Tax Purposes Owner Primary Taxpayer City Of Monticello 505 Walnut St Ste 1 Monticello, MN 55362 GIS Acreage Parcel: 155273001010 Acres: 0.00 Acres USAB: 9.76 Acres WATE: 0.00 Acres ROW: 0.00 Sq Ft: 425,326.70 Recent Sales In Area Sale date range: From: 10/06/2019 To: 10/06/2022 1500 Feet v C-riles by Distance Transfer History Grantor CITY OF MONTICELLO; M & B ON CHELSEA LLC Grantee OTTER CREEK CROSSING 7TH ADDITION Note: Transfer History data is from LandLink beginning 01/01/2003. Taxation (Preliminary 2023 Taxes Payable) Estimated Market Value Excluded Value Homestead Exclusion Taxable Market Value Net Taxes Due + Special Assessments = Total Taxes Due % Change Taxes and Special Assessments Payable in 2022 are preliminary. Recorded Date Doc Type Doc No 7/25/2022 PLT 1512795 2023 Proposed $489,900 $0 $0 0.00% https://beacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=1310&KeyValue=155273001010 1 /2 10/6/22, 4:44 PM Map Beacon - Wright County, MN - Report: 155273001010 No data available for the following modules: Land GA/RP, Land, Buildings, Extra Features, Sales, Valuation, Taxation, Taxes Paid, Photos, Sketches. The information provided on this site is intended for reference put -pose-, only. The information is not suitable for legal, engineering, ot r­.­,.­"!,)'-'�(-d 11'1 Surveying purposes. Wright County does not guarantee the accuracy of the information contained herein. 4.1 Schneider User Privacy Policy GEOSPAT IAL GDPR Privacy Notice Last Data Upload: 10/6/2022,7:18:26 AM Version, 2.3.224 https:llbeacon.schneidercorp.com/Application.aspx?ApplD=187&LayerlD=2505&PageTypelD=4&PagelD=l 310&KeyValue=15527300101 0 2/2 ",,Beacon I tv Wright County, MN nits h Date created: 10/6/2022 Last Data Uploaded: 10/6/2022 8:18:26 AM Developed by4"$ Schneider GEOSPATIAL EDA Agenda: 10/12/22 9. Consideration of Authorizing a Right of Entry with Headwaters Development for EDA owned parcels for the purpose of mass site grading activities related to an apartment and twin home development proposal JJT) A. REFERENCE AND BACKGROUND: The EDA is being asked to authorize a Right of Entry with Headwaters Development (Headwaters) for the EDA owned property (Country Club Manor - 7t" Street West) that is intended as multi -family and twin home residential development. Headwaters is seeking the Right of Entry to start the excavation and grading activities for both of the distinct development proposal sites. The City Council approved the Final Stage PUD and Final Plat both of the residential development proposals at the September 26, 2022 City Council meeting. Headwaters has informed city staff that is considers the excavation and grading tasks as critical to keeping the project on an efficient development schedule. Their main objective is to start excavation and grading work tasks now and proceed with construction of the slab on grade twin homes in late fall of 2022. Previously, at the July 27, 2022, meeting, the EDA approved a Right of Entry for Headwaters, allowing it to complete a supplemental Phase II Environmental Study and related reports at the development site. In early spring of 2022, Headwaters was provided a Right of Entry to conduct environmental assessment tasks as well as the initial Phase II study. The current request for a Right of Entry is related to permanent alterations to the site and needs EDA approval. Also, as a reminder, the EDA approved additional funding assistance to Headwaters for the purpose of completing the supplemental Phase II study and for a limited amount of contaminated soil remediation work. It should be noted that the findings of the supplemental Phase II Study revealed no additional soil contamination. This clarified the limited scope of work necessary to address the contaminated soil and helps define the process and methods required by the Minnesota Pollution Control Agency (MPCA). Headwaters is indicating that closings on the two separate parcels will occur on different dates. The developer told staff that it would like to close on the purchase of the twin home development site in the next 10 to 15 days. For the multi -family development component, a realistic closing date may be in early December as the final design, bidding, and costing steps for that project are not yet finalized. The Right of Entry for Headwaters would be subject to three key conditions. They include: • Contingent on approved grading plan • Submission of required securities per the City Engineer • Compliance with all required environmental guidance and remediation resulting from the site investigations • Providing appropriate liability insurance coverage with the EDA and City as named insureds Al. STAFF IMPACT: There is a low staff impact in the EDA consideration of a Right of Entry for Headwaters Development for the purpose of excavation and grading activities. Staff involved included the Community Development Director, Economic Development Manager, the City Engineer, the Project Engineer and the EDA attorney. A2. BUDGET IMPACT: There is a minimal budget impact related to EDA consideration of authorizing a Right of Entry with Headwaters Development for the EDA owned Country Club Manor parcel along 7th Street West. Staff discussed the Headwaters request with the EDA attorney, though the proposed Right of Entry document uses a template and was completed by in-house staff. B. ALTERNATIVE ACTIONS: 1. Motion to authorize a Right of Entry with Headwaters Development for the EDA owned property (Country Club Manor) along 7th Street West for the purpose of excavation and grading activities, contingent on the stated contingencies. 2. Motion to table authorization of a Right of Entry for Headwaters Development for the EDA owned property (Country Club Manor) along 7th Street West for further research and/or discussion. 3. Motion of other as determined by the EDA. C. STAFF RECOMMENDATION: Staff recommends Alternative 1. Authorizing a Right of Entry for Headwaters Development for the purpose of excavation and grading would allow both the apartment and the twin home developments to be started with critical initial work tasks that become problematic with the onset of winter conditions. If the excavation and grading activities are delayed, it may push the start of the two projects out to the spring of 2023 with building construction also delayed into the summer of 2023. D. SUPPORTING DATA: A. Right of Entry B. Aerial Photo RIGHT OF ENTRY (10-07-22) The City of Monticello Economic Development Authority, hereinafter called "EDA"; does hereby consent and grant to Headwaters Development, LLC, hereinafter called the "Licensee", and its agents a license to enter only, for the purpose of surveyin , staking, taking, excavation and grading activities, across the following described lands situated in the County of Wright, State of Minnesota, to -wit: Outlot A, Country Club Manor, Wright County, MN (16.71 acres), related to the Headwaters Development apartment development proposal site and the Villa Twin homes development proposal sites. Contingent Requirements are: 1. Contingent on approved grading plan 2. Submission of required securities per the City Engineer 3. Compliance with all required environmental guidance and remediation resulting from the site investigations 4. Providing appropriate liability insurance coverage with the EDA and City as named insureds. This right to enter shall commence on October 13, 2022 and terminate on January 31, 2023. Licensee shall accept the Premises in "as is" condition and upon the termination of this agreement shall surrender the Premises in substantially the same condition in which it was at the beginning of the occupancy. Licensee or its agents shall perform all activities on the Premises authorized under this license in a safe and professional manner. Licensee shall indemnify, defend, save, and hold harmless the City and the EDA, its officers and employees from all claims, expenses, losses, or liabilities in connection with Licensee's use of the Premises or because of any claims or liability arising from any violation of any law or regulation made in accordance with the law, whether by Licensee or any of its agents or employees. This Agreement is binding upon the parties, their successors in title or interest, assignees, and heirs. Licensee shall not assign any of its rights or responsibilities hereunder without first obtaining the written consent of the Owner. The license granted by this Agreement is a mere license to use the Premises for the specified purposes as set forth herein and does not create any estate or interest in the Premises. Page 1 of 2 (LICENSEE NAME) Its STATE OF MINNESOTA ) ) ss. COUNTY OF WRIGHT) The foregoing instrument was acknowledged before me this 2022, by the a Minnesota limited liability corporation, on its behalf STATE OF MINNESOTA ) ss. COUNTY OFWRIGHT ) Notary Public CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY day of of Jim Thares Economic Dev. Manager/Executive Director, EDA The foregoing instrument was acknowledged before me this day of , 2022, by Jim Thares, the City of Monticello, Economic Development Manager and Executive Director of the EDA, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council and Economic Development Authority. This instrument was drafted by: City of Monticello 505 Walnut Street, Suite 1 Monticello, MN 55362 Notary Public Page 2 of 2 fM 0,,,,Beacon Wright County, MN Overview Legend Roads — CSAHCL — CTYCL MUNICL --6 PRIVATECL -- TWPCL Highways Interstate State Hwy US Hwy City/Township Limits ❑c ❑t Parcels Date created: 12/2/2021 Last Data Uploaded: 12/2/20218:31:27 AM Developed by" Schneider GEOS?ATIAL EDA Agenda: 10/12/22 10. Economic Development Director's Report (JT) A. Suburban Manufacturing Expansion Update — Excavation activities have started at the site. Construction of the new building, with sidewall panels and roof components will continue upon the delivery of those materials in the late winter -early spring of 2023. The expansion project is expected to be completed by late summer 2023. Suburban Manufacturing is involved engineering and manufacturing critical functional and safety products used in fluid power -hydraulic equipment and machinery. The specific industrial sectors that utilize their products include: Construction, Agricultural, Transportation, Industrial and Utilities. B. Wiha Tools Expansion New Warehouse -Assembly Facility 73,500 sq. ft. — Development plan sets have been submitted. The development proposal will be on the November 1, 2022, Planning Commission Agenda. Staff are awaiting the MIF loan ($220,000 forgivable loan) document packet from MN -DEED. The MIF Loan is expected to be considered by the City Council in late October or early November. C. Manufacturers Appreciation Breakfast Event on Thursday October 13, 2022 —The event speaker is Dr. King Banaian, St. Cloud State University (SCSU), Economist, Dean and Professor of Economics, School of Public Affairs (SOPA) D. Prospect List Update: Please see the updated Prospect List as Exhibit A Date of Contact 6/22/2017 5/22/2018 11/29/2018 3/28/2019 5/9/2019 8/16/2019 1/20/2020 8/27/2020 30-22 11/5/2020 2/16/2021 3/19/2021 Company Name Business Category Project Description Project #6580 Metal Mfg. New Facility Constr. Karlsburger Foods Food Products Mfg. Facilty Expansion Project Blitzen Precision Machining Exist Bldg or New Const. Building -Facility Retained lobs New lobs Total Investment Project Status 70,000 sq. ft. 0 49 $5,480,000 On Hold 20,000 sq. ft. +/- 42 10 to $4,500,000 On Hold 20 _ 12,000 sq. ft. 10 $1,200,000 Concept Stage Project Nutt Co -Working Space Existing Building ? ? Project FSJP Light Mfg -Res. Lab New Construction 20,000 sq. ft. 0 Project Jaguar Office New Construction 22,000 sq. ft. 22 Project Panda v3 Service -Child Care New Construction 10,500 sq. ft. 0 Project Nuss Combo Service -sale New Construction 30,000 sq. ft. 0 Project TDBBST Industrial New Construction 10,OOOto15,000sq. 0 ft. Project Flower Office Existing 7,000-8,000 sq. ft. 0 Project Cold Industrial -Warehouse -Di New Construction 80,000 sq. ft. 0 stri Project Orion Warehouse-Distributi New Construction 832,500 sq. ft. 0 on ? ? Concept Stage 20+/- $1,400,000 Active Search 4 $2,700,000 Active Search 21 $4,100,000 Active Search 20 to $3,500,000 Almost Done 30 9 $1,850,000 Concept Stage 12 $750,000 Concept Stage 21 $12,000,000 Concept Stage 500 $125,000,000 Active Search 2/28/2022 Project Emma II Light Ind -Assembly New Construction 20,000 sq. ff. 0 4 $1,350,000 Active Search 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 7/29/2021 10/28/2021 Project Ecosphere Industrial Tech Mfg. New Construction 1,000,000 sq. ft. 0 1122 $85,000,000 Act Search Project BA710 Lt Assem-Distribute New Construction 6,500 to 7,000 sq. ft 0 10 $650,000 Active Search Project Stallion Technology Service New Construction WW000 sq� � $3,600,000 Active Search 2/7/2022 Project Shepherd III Lt Assembly Distribution New Construction 75,000 sq. ft. 4/28/2022 Project Cougar Precision Machining -Mfg. New Construction 35,000 to 45,000 sq. ft. 8/11/2022 Project Sing Precision Machining New Construction 400,000 sq. ft. Contacts: M = 04 YTD = 22 75 $10,500,000 Active Search 38 $4,700,000 Active Search 0 500 $90,000,000 Active Search