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EDA Agenda - 11/09/2022AGENDA REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, November 9th, 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 Charlotte Gabler 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 —August 29, 2022 b. Consideration of Approving Regular Meeting Minutes— September 14, 2022 c. Consideration of Approving Payment of Bills Regular Agenda 5. Consideration of Resolution No. 2022-33 Approving an Option Agreement Granting Washburn Computer Group, Inc. the Option to Purchase a Vacant 1.46-acre Parcel Located at 9699 Fallon Avenue 6. Consideration of Resolution No. 2022-34 Revising the Downtown Fagade Improvement Program's Policies and Procedures 7. Consideration of Resolution No. 2022-35 Approving an Assignment and Assumption of Purchase and Development Contract and Assignment of Tax Increment Financing Note by Headwaters Development LLC to CHC Monticello Townhomes LLC related to proposed residential development at the Country Club Manor, Second Addition site 8. Consideration of Update of Draft Region 7W 2022 Comprehensive Economic Development Strategy (CEDS) Report 9. Economic Development Manager's Report 10. Adjourn MINUTES SPECIAL MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Monday, August 29th, 2022 — 7:30 a.m. Mississippi Room, Monticello Community Center Commissioners Present: Vice President Jon Morphew, 011ie Koropchak-White, and Councilmembers Lloyd Hilgart and Jim Davidson Commissioners Absent: President Steve Johnson, Treasurer Tracy Hinz, Hali Sittig Staff Present: Executive Director Jim Thares, Angela Schumann, Hayden Stensgard 1. Call to Order Vice -President Jon Morphew called the special meeting of the Monticello EDA to order at 7:30 a.m. 2. Roll Call Mr. Morphew called the roll. 3. Consent Agenda a. None Regular Agenda 4. Consideration to adopt a resolution aDDrovine a Quit Claim Deed convevine Dortions of parcels 155-01005231, 155-010052060, 155-010052131, and inclusive of property to be platted as Lot 1 Block 1 of Block 52 First Addition from the Economic Development Authority to the City of Monticello Community Development Director Angela Schumann provided an overview of the agenda item to the EDA and the public. The quit claim deed that would convey portions of EDA land to the City of Monticello is so that the remnant portions of the EDA owned property will become part of the City's lots as part of the proposed Block 52 Addition plat. LLOYD HILGART MOVED TO ADOPT EDA RESOLUTION 2022-27 APPROVING A QUIT CLAIM DEED CONVEYING PARCELS 155-010052031, 155-010052060, 155-010052131, AND INCLUSIVE PROPERTY TO BE PLATTED AS LOT 1, BLOCK 1, OF BLOCK 52 ADDITION AS LEGALLY DESCRIBED TO THE CITY OF MONTICELLO IN SUPPORT OF REDEVELOPMENT OF A PORTION OF BLOCK 52, MONTICELLO. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 4-0. 5. Adjourn JIM DAVIDSON MOVED TO ADJOURN THE SPECIAL MEETING OF THE MONTICELLO EDA. OLLIE KOROPCHAK-WHITE SECONED THE MOTION. MOTION CARRIED UNANIMOUSLY, 4-0. MEETING ADJOURNED AT 7:35 A.M. MINUTES REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA) Wednesday, September 14th, 2022 — 6:00 p.m. Mississippi Room, Monticello Community Center Commissioners Present: President Steve Johnson, 011ie Koropchak-White, Hali Sittig and Councilmembers Lloyd Hilgart and Jim Davidson Commissioners Absent: Vice President Jon Morphew, Treasurer Tracy Hinz Staff Present: Executive Director Jim Thares, 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 Aaarovine Regular Meeting Minutes —June 22. 2022 b. Consideration of Approving Workshop Meeting Minutes —July 13, 2022 c. Consideration of Approving Regular Meeting Minutes —July 13, 2022 d. Consideration of Approving Payment of Bills OLLIE KOROPCHAK-WHITE MOVED TO APPROVE THE SEPTEMBER 14, 2022 REGULAR MEETING CONSENT AGENDA. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. Regular Agenda 5. Consideration of Authorizing a Budget Amendment to WSB Relocation Services Contract in the amount of $2,816 Executive Director Jim Thares provided an overview of the agenda item to the EDA and the public. The original contract was approved roughly two and a half years ago. The need for the updated budget request is partly due to an unexpected number of claims filed for relocation. HALI SITTIG MOVED TO AUTHORIZE AN AMENDMENT TO THE WSB PROFESSIONAL SERVICE RELOCATION ASSISTANCE CONTRACT INCREASING THE BUDGET AMOUNT BY $2,816. OLLIE KOROPCHAK-WHITE SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. 6. Consideration of Sota Car Wash, LLC dba Due North GMEF Loan Subordination ($140,000) to Cor Trust Bank (CTB) for additional mortgage loan financing for Car Wash development located at 1301 Cedar Street Mr. Thares provided an overview of the agenda item to the EDA and the public. Due North Car Wash requested additional funding from Cor Trust Bank. The EDA is asked to act on the subordination, due to their connection with Due North through the Greater Monticello Enterprise Fund (GMEF). It was noted that the additional funding would be for the addition of a pylon sign along Highway 25, as well as additional vacuums on site. Mr. Thares suggested that the EDA approve the subordination contingent upon Due North agreeing to an automatic payment method with the EDA for their GMEF Loan payments. 011ie Koropchak-White asked if the Planning Commission has already approved plans for a pylon sign at the Due North Location. Community & Economic Development Coordinator Hayden Stensgard clarified that the sign permit process does not require Planning Commission review and approval. Sign permit applications are reviewed and approved/denied at the administrative level, and the Community Development Department has not received an application yet. Hali Sittig asked what the status of Due North's loan payments are with the City. Mr. Thares clarified that as of July 25, 2022, they were caught up on the June and July payments. As of September 14, 2022, neither the August nor September payments had been received. LLOYD HILGART MOVED TO APPROVE A LOAN SUBORDINATION AGREEMENT BETWEEN THE EDA AND CTB RELATED TO THE EDA'S $140,00 GMEF LOAN TO DUE NORTH In CONNECTION WITH AN ADDITIONAL $500,000 MORTGAGE LOAN FROM CTB TO DUE NORTH CONTINGENT ON EDA ATTORNEY REVIEW AND TO FURTHER REQUIRE NEW DUE NORTH PARTNER, NATE PIERSON, TO COMPLETE A PERSONAL GUARANTEE FORM SECURING THE EDA LOAN, AND REUQIRING DUE NORTH TO SET UP AN AUTOMATIC PAYMENT PROCESS FOR THEIR MONTHLY GMEF LOAN PAYMENTS. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. 6.5 Consideration of Authorizing Party Wall Agreement between the EDA, Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC and John Thorud related to common shared wall between 121 and 149 West Broadway Mr. Thares provided an overview of the agenda item to the EDA and the public. This item was brought forth to the EDA due the Block 52 Redevelopment Project exposing a connection wall during the demolition process. The end building to be removed is connected to a building that will remain on the block. The party wall agreement will help ensure the exposed wall will be brought to the standards needed to become an exterior wall. LLOYD HILGART MOVED TO AUTHORIZE ENTERING INTO THE PARTY WALL AGREEMENT RELATED TO THE SHARED COMMON WALL BETWEEN 121 AND 149 WEST BROADWAY WITH BLOCK 52 HOLDINGS, LLC, BUCHHOLZ EXCHANGE, LLC, NORGREN EXCHANGE, LLC AND JOHN THORUD. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. 6.75 Consideration of Resolution No. 2022-28 Approving Restated Purchase and Development Contract containing a Grant and Business Subsidy Agreement with Block 52 Holdings, LLC, Buchholz Exchange, LLC and Norgren Exchange, LLC (fka Deephaven Development) for Lot 2, Block 1, Block 52 First Addition, in the amount of $1,351,617 related to a proposed Mixed -Use Commercial -Residential Development in connection with and supported by Redevelopment TIF District No. 1-45 Mr. Thares provided an overview of the agenda item to the EDA and the Public. The need for the restated Purchase and Development Contract related to the EDA land on Block 52 in Monticello, is due to the addition of two developer equity partners being added to the overall development project. Originally, it was understood that the developer would purchase the property for $1, and subsequently pay the EDA back through the TIF District. The restated purchase and development contract will include the upfront cost of the land. This is a request made by the developer to satisfy IRS (Internal Revenue Service) 1031 Exchange rules. Mr. Johnson asked if payment for the land up front will include similar limitations towards how those funds can be used in the future when collected over time through the TIF District. Mr. Thares clarified that there are no restrictions on what the EDA can do with the money received from the land sale. The funds will go into the EDA General Fund. JIM DAVIDSON MOVED TO ADOPT RESOLUTION NO. 2022-28 AUTHORIZING A RESTATED PURCHASE AND REDEVELOPMENT CONTRACT CONTAINING A GRANT AND BUSINESS SUBSIDY AGREEMENT WITH BLOCK 52 HOLDINGS, LLC, BUCHHOLZ EXCHANGE, LLC AND NORGREN EXCHANGE, LLC FOR THE CONVEYANCE OF LOT 2, BLOCK 1, BLOCK 52 FIRST ADDITION, IN THE AMOUNT OF $1,351,617 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, 5-0. Further discussion ensued related to the need for a potential special meeting on Friday, September 16, 2022. The EDA unanimously decided that instead of holding a special meeting on Friday to review and consider, they would agree to the revised documents at issue contingent upon review and advice from the Monticello EDA Attorney. 7. Economic Development Manager's Report Mr. Thares provided an overview of the agenda item to the EDA and the public. 8. Adjourn OLLIE KOROPCHAK-WHITE MOVED TO ADJOURN THE REGULAR MEETING OF THE MONTICELLO EDA. JIM DAVIDSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 5-0. MEETING ADJOURNED AT 7:01 P.M. EDA Agenda: 11/09/22 4d. 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 October 2022. 2. Motion to approve payment of bills through October 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 CITY F � User: Julie.CheneyontiPrinted: 10/06/2022 - 10:56AM effo Batch: 00202.10.2022 Account Number Vendor Description GL Date Check No Amount PO No 213-00000-155020 BITCO INSURANCE COMPANIES Prepaid Work Comp Ins 10/22 - 10/23 10/11/2022 126170 1,400.00 Vendor Subtotal for Dept:00000 1,400.00 213-00000-220110 ECM PUBLISHERS INC TIF 1-45 Block 52 PH Cancellation A 10/11/2022 0 313.82 Vendor Subtotal for Dept:00000 313.82 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-45 - Block 52 Redevelopment - 10/11/2022 126189 8,189.50 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-46 - Wiha Tools TIF Project -A 10/11/2022 126189 243.00 213-00000-220110 KENNEDYAND GRAVEN CHAR] TIF 1-44 - Washburn POS Economic I 10/11/2022 126189 250.00 Vendor Subtotal for Dept:00000 8,682.50 213-46301-415100 BITCO INSURANCE COMPANIES Work Comp Ins 10/22 - 10/23 10/11/2022 126170 467.00 Vendor Subtotal for Dept:46301 467.00 213-46301-430400 KENNEDYAND GRAVEN CHAR] General EDA- August 2022 10/11/2022 126189 572.00 Vendor Subtotal for Dept:46301 572.00 Subtotal for Fund: 213 11,435.32 AP -Transactions by Account (10/06/2022 - 10:56 AM) Page 1 Account Number Vendor Description GL Date Check No Report Total: Amount PO No 11,435.32 AP -Transactions by Account (10/06/2022 - 10:56 AM) Page 2 Accounts Payable Transactions by Account CITY F User: Julie.Cheney e Printed: 10/20/2022 - 8:08AM onti ffo Batch: 00203.10.2022 Account Number Vendor Description GL Date Check No Amount PO No 213-00000-220110 NORTHLAND SECURITIES INC TIF 1-45 - Block 52 - Sept 2022 10/25/2022 126288 1,827.50 Vendor Subtotal for Dept:00000 1,827.50 213-46301-431990 WSB & ASSOCIATES INC Suburban Mfg Expansion - Aug 2022 10/25/2022 0 3,023.75 213-46301-431990 WSB & ASSOCIATES INC Downtown Redev - Aug 2022 10/25/2022 0 669.50 213-46301-431990 WSB & ASSOCIATES INC 22CO04 - Block 52 StructuralAssessrr 10/25/2022 0 2,141.00 Vendor Subtotal for Dept:46301 5,834.25 213-46301-431993 WSB & ASSOCIATES INC 2022 Economic Development Service; 10/25/2022 0 1,567.50 Vendor Subtotal for Dept:46301 1,567.50 213-46301-433100 JAMES THARES Mileage Reimbursement (16 miles) 10/25/2022 0 10.00 Vendor Subtotal for Dept:46301 10.00 Subtotal for Fund: 213 9,239.25 Report Total: 9,239.25 AP -Transactions by Account (10/20/2022 - 8:08 AM) Page 1 Accounts Payable Transactions by Account User: Julie.Cheney Printed: 10/18/2022 - 10:31AM Batch: 00201.10.2022 Account Number Vendor Description CITYMonticello GL Date Check No Amount PO No 213-46301-421990 US BANK CORPORATE PMT SYS Monti Printing - IEDC Breakfast Invit 10/15/2022 0 128.48 Vendor Subtotal for Dept:46301 128.48 213-46301-433100 US BANK CORPORATE PMT SYS EDAM - Registration for Training (HE 10/15/2022 0 500.00 Vendor Subtotal for Dept:46301 500.00 213-46301-438200 CITY OF MONTICELLO 7256-004 - 130 Brdwy- Stormwtr 10/15/2022 0 26.25 213-46301-438200 CITY OF MONTICELLO 7256-007 - 103 Pine St- EDA 10/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-008 - 112 River St. W EDA 10/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-0010 - 101 Brdwy W-EDA 10/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-0011 107 Brdwy W- EDA 10/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-013 - 113 Brdwy W - EDA 10/15/2022 0 45.50 213-46301-438200 CITY OF MONTICELLO 7256-014 - 121 Brdwy W - EDA 10/15/2022 0 45.50 Vendor Subtotal for Dept:46301 299.25 213-46301-443990 US BANK CORPORATE PMT SYS Gold Medallion Awards - Plaque for J 10/15/2022 0 55.70 213-46301-443990 US BANK CORPORATE PMT SYS Monti Chamber - Aug Chamber Luncl 10/15/2022 0 20.00 213-46301-443990 US BANK CORPORATE PMT SYS Caribou -Gift Cards for IEDC (10/$5) 10/15/2022 0 50.00 Vendor Subtotal for Dept:46301 125.70 Subtotal for Fund: 213 1,053.43 AP -Transactions by Account (10/18/2022 - 10:31 AM) Page 1 Account Number Vendor Description GL Date Check No Report Total: Amount PO No 1,053.43 AP -Transactions by Account (10/18/2022 - 10:31 AM) Page 2 Accounts Payable Transactions by Account User: Julie.Cheney Printed: 11/01/2022 - 1:34PM Batch: 00215.10.2022 Account Number " CITY O F ' 4 onti effo Vendor Description GL Date Check No Amount PO No 213-46301-438100 CENTERPOINT ENERGY 6402832805-8 - 113 Broadway W FIT 10/31/2022 0 30.77 213-46301-438100 CENTERPOINT ENERGY 11688591-4 - 121 Broadway W FINA 10/31/2022 0 29.32 Vendor Subtotal for Dept:46301 60.09 213-46301-438100 XCEL ENERGY 51-13295413-8 - 103 Pine St 10/31/2022 0 0.00 Vendor Subtotal for Dept:46301 0.00 213-46301-443990 DEMVI LLC Parking Lot Maintenance - Oct 2022 10/31/2022 0 213.86 Vendor Subtotal for Dept:46301 213.86 Subtotal for Fund: 213 273.95 Report Total: 273.95 The preceding list of bills payable totaling $22,001.95 was approved for payment. Date: 11/9/2022 Approved by: Tracy Hinz - Treasurer AP -Transactions by Account (11/01/2022 - 1:34 PM) Page 1 EDA: 11/09/22 5. Consideration of Adopting Resolution No. 2022-33 Authorizing a Restated Land Purchase 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 (JT) A. REFERENCE AND BACKGROUND: The EDA is asked to consider adopting Resolution No. 2022-33 authorizing a restated land purchase 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. The original Option Agreement was approved by the EDA at the October 12, 2022 meeting. Following the meeting, Washburn Computer Group contacted city staff to review concerns about the pricing format for years 2 and 3 and asked if a modification reducing the premiums could be considered. The EDA also authorized the acquisition of the subject parcel (9699 Fallon Avenue) for $300,000 at the October 12, 2022 meeting. The closing transaction is slated to occur on or about November 30, 2022. As noted previously, Washburn Computer's views this parcel as a crucial component of its growth plans. Specifically, the company plans 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 expansion may also be possible on the site in the future. Washburn's development proposal involves a TIF District (1-44) which was established by the City Council and EDA in the spring of 2022. The TIF District includes the subject parcel. Washburn's expansion development timeline has been paused due to the current economic uncertainty and to allow additional time for a methodical exploration of the best financing from lenders and more engagement with building contractors. The new development timeline is projected as being late fall of 2024 or spring of 2025. The EDA's purchase of the parcel and the subsequent restated 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 = $15,000 each ($30,000 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 EDA: 11/09/22 ✓ 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 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 Washburn determines that it is not in its interest to pursue its expansion proposal, the EDA would be able to market the lot to other prospective industrial users. In that instance, per the Option Agreement, Washburn would 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 restated Option Agreement include the Community Development Director, Economic Development Manager, and the EDA attorney. Tasks included minor revisions edits to the approved yet unsigned Option Agreement along with preparation of the EDA Resolution and staff report and the EDA meeting time. No other staff are needed to complete the property purchase work tasks. A2. BUDGET IMPACT: The budget impact from the 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 a partial offset of the EDA's land acquisition costs of $300,000. Legal fees related to the Option Agreement are estimated to be about $870 to $1,100 +/-. Those fees will be passed onto Washburn. 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 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. 2022-33 authorizing a restated land purchase 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. 2022-33 for further research and/or discussion. 2 EDA: 11/09/22 C. STAFF RECOMMENDATION: Staff recommends Alternative #1. Entering into a restated land purchase Option Agreement with Washburn Computer Group for the 1.46-acre parcel is key step in preserving a crucial site for Washburn's warehouse expansion proposal. By entering into the restated Option Agreement, the 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 +/- expansion. If Washburn decides to not proceed with the development, it will forfeit the Option Price payment of $55,000 plus any renewal premiums (potentially $15,000 to $30,000) paid to the EDA. If this scenario were to occur, the EDA would need to sell the lot for $215,000 $245,000 (average total of $3.62 per square foot) to fully recoup its original purchase price of $300,000. Ultimately, in authorizing the restated Option Agreement, the EDA addresses a key policy objective in facilitating an economic development project with job creation and tax base increase impacts by allowing Washburn to reserve the site for a proposed warehouse expansion. D. SUPPORTING DATA: a. Resolution No. 2022-33 b. Restated Option Agreement c. Wright County Beacon Information d. Parcel Aerial Photo EDA RESOLUTION NO. 2022-33 RESOLUTION APPROVING AN OPTION AGREEMENT GRANTING THE WASHBURN COMPUTER GROUP, INC. THE OPTION TO PURCHASE THE PROPERTY LOCATED AT 9699 FALLON AVENUE BE IT RESOLVED BY the Board of Commissioners (the "Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. On October 12, 2022, the Authority and The Washburn Computer Group, Inc. (the "Buyer") adopted a resolution approving an option agreement (the "Original Option Agreement"), pursuant to which the Buyer would 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 process of acquiring from Platinum Technologies, LLC/Powersports Services LLC for economic development purposes. The Property is described in Exhibit A attached hereto. 1.02. The Authority and the Buyer now wish to revise the Original Option Agreement and present a new option agreement to the Board for consideration (the "Option Agreement"). 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. 1 MN325\48\828508.v2 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.v2 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.v2 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 The Washburn Computer Group, Inc., 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: 1. 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 1 MN325\48\828379.v2 shall be credited against the Purchase Price payable for the Property as set forth in 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 $15,000 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 $30,000 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 extensions 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 2 MN325\48\828379.v2 days after receipt of the title commitment, the Buyer shall notify the Seller in 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. MN325\48\828379.v2 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 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 4 MN325\48\828379.v2 conditions as may be required by Minnesota statutes or rules or city ordinances; 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. 5 MN325\48\828379.v2 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: 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 LegalCapacity. 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 6 MN325\48\828379.v2 Code, nor has any petition for bankruptcy or receivership been filed against Seller within the last year. 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: The Washburn Computer Group, Inc. 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 7 MN325\48\828379.v2 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 Seller harmless from the claims of any broker, real estate agent, or similar party claiming through the Buyer. 15. Binding Effect. 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.v2 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.v2 BUYER THE WASHBURN COMPUTER GROUP, INC. Its: STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of , 2022, by the of The Washburn Computer Group, Inc., 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 10 MN325\48\828379.v2 EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park Yd Addition, County of Wright, State of Minnesota Parcel ID: 155249001010 A-1 MN325\48\828379.v2 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 The Washburn Computer Group. Inc., 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 XX9699 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: 1. 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 MN325 -148 -1828379.v12 shall be credited against the Purchase Price payable for the Property as set forth in 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 $55,99915 9Q_ 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 $110,0DQ39,M 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 extensiaa(s0extensio1s 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. 2 MN325 A j828379.v-12 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 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 C. The condition of title being satisfactory to the Buyer following the Buyer's examination of title as provided in Section 6 of this Agreement. 3 MN325 A j828379.v-12 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 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 4 MN325 A8 j828379.v-12. conditions as may be required by Minnesota statutes or rules or city ordinances; 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. s MN325 A j828379.v-12, 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: 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 6 MN325 A8 j828379.v-12. Code, nor has any petition for bankruptcy or receivership been filed against Seller within the last year. 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 parry hereto or by anyone on behalf of any parry 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: Th�Washburn Computer Groin 218 Chelsea Road Monticello, MN 55362 Attn: or such other address as either parry 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 7 MN325 A8 j828379.v-12. 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 Seller harmless from the claims of any broker, real estate agent, or similar parry claiming through the Buyer. 15. Binding Effect. 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 A8 j828379.v-12. 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 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 MN325 A8 j828379.v-12. BUYER THE—WASHBURN COMPUTER__ GROUP. INC. Its: STATE OF MINNESOTA ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged , 2022, by the The -Washburn Computer Group, a Minnesota corporation. This instrument was drafted by: Kennedy & Graven, Chartered (SJS) Fifth Street Towers, Suite 700 150 South Fifth Street Minneapolis, MN 55402 (612) 337-9300 before me this corporation on behalf Notary Public day of of of the io MN325 A8 j828379.v-12. EXHIBIT A Legal Description of the Property Lot 1, Block 1, Oakwood Industrial Park 31 Addition, County of Wright, State of Minnesota Parcel ID: 155249001010 A- 1 MN325 A8 j828379.v-12. Document comparison by Workshare 10.0 on Wednesday, November 2, 2022 8.46.09 AM Input: Document 1 ID Powerpocs://DOCSOPEN/828379/1 Description DOCSOPEN-#828379-vl-Option _ Agreement Document 2 ID Powerpocs://DOCSOPEN/828379/2 Description DOCSOPEN-#828379-v2-Option_ Agreement Rendering set Standard Legend: Style change Format change '40"'eO deletion Inserted cell Deleted cell Moved cell Split/Merged cell Padding cell Statistics: Count Insertions 21 Deletions 13 Moved from 0 Moved to 0 Style change 0 Format changed 0 Total changes 34 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: 11 /02/22 6. Consideration of Adopting Resolution No. 2022-34 Amending the Facade Improvement Program Guidelines format from a "Grant" to a "Forgivable Loan" (JT/AS) A. REFERENCE AND BACKGROUND: Recently the EDA attorney recommended that the Facade Improvement funding format be revised prior to approving any future application submittals. The proposed program format change is intended to ensure compliance with MN Statutes which do not allow non TIF, unrestricted funds to be offered to businesses as a "Grant". With that guidance, staff is asking the EDA consider adopting Resolution No. 2022-34 revising the format of the Facade Improvement Grant Program (FIGP). Specifically, the amended Guidelines would adjust the format of the Facade Improvement funding from a "Grant" to a "Forgivable Loan". A Forgivable Loan format would essentially provide the same funding benefit as a Grant, except that it will require recipients to achieve minimum public benefit performance goals. The intention is to structure the performance goals as easily achievable for the recipients. As written, the proposed amended guidelines generally allow for loan forgiveness over the course of five years, with twenty percent of the principal forgiven each year. The guidelines also allow for the EDA to extend or reduce the forgiveness period based on the dollar amount of the loan. A smaller loan could require a shorter payback timeframe. If the building is sold within that time frame, the loan is due. This structure is common across other fagade improvement programs. While staff believes that the proposed structure makes sense and is workable, the EDA is encouraged to provide comment and discuss potential different general time frames or other repayment triggers which may be better. The EDA originally committed $200,000 to the Facade Improvement program in the spring of 2019 and shortly after the initial commitment increased the funding commitment to $250,000 based on the level of interest. The balance in the fund now stands at $200,000 as only one property, in Block 35, has completed a project (Agosto Law Building). On April 27, 2022, the Program target area was expanded by including Block 52. It is expected that the recently initiated redevelopment activities in Block 52 will result in several more funding applications being submitted to the EDA for consideration in the near future. The only changes included in the proposed amendment are those that address reformatting the program from a Grant to a Forgivable Loan. Al. STAFF IMPACT: Staff involved in the tasks of reformatting the Facade Improvement Funding Program from a Grant to a Forgivable Loan include the EDA attorney, the Community Development Director, and the Economic Development Manager. EDA: 11 /02/22 A2. BUDGET IMPACT: There is a modest budget impact involved in reformatting the Facade Improvement Program from a Grant to a Forgivable Loan. The EDA attorney has several hours involved in the amendment research and language drafting tasks. Legal fees related to the amendment process are estimated to be $1,250 to 1,400. The EDA General Fund legal fees line item is the proposed source of funding for the legal fees. B. ALTERNATIVE ACTIONS: 1. Motion to adopt Resolution No. 2022-34 approving amended Facade Improvement Program Guidelines containing language reformatting it from a Grant to a Forgivable Loan. 2. Motion to table consideration of Resolution No. 2022-34 approving amended Facade Improvement Program Guidelines for further research and/or discussion. 3. Motion of other as directed by the EDA. C. STAFF RECOMMENDATION: Staff recommends Alternative # 1. The proposed amendment to the Facade Improvement Program Guidelines reformatting the funding structure from a Grant to a Forgivable Loan is recommended by the EDA attorney. The proposed revisions to the Facade Improvement Program are intended to achieve compliance with State statutes which do not allow non-TIF, unrestricted funds to be provided to businesses in a grant format. The proposed Forgivable Loan structure is nearly the same as a Grant with required performance goals. The change would require the property recipient to complete annual certification reporting step as well. D. SUPPORTING DATA: a. Resolution 2022-34, Revising the Downtown Facade Improvement Program's Policies and Procedures b. Amended Facade Improvement Program Guidelines — Redline Version CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-34 RESOLUTION REVISING THE DOWNTOWN FA('ADE IMPROVEMENT PROGRAM'S POLICIES AND PROCEDURES WHEREAS, the City of Monticello Economic Development Authority (the "Authority") recognizes the need to encourage investment in commercial and retail buildings in the downtown area of the City of Monticello, Minnesota (the "City") in order to maintain the economic viability of the City and the City's downtown; and WHEREAS, the Authority has previously established the Downtown Fagade Improvement Program (the "Program") to support a visually and financially appealing downtown and City by providing funds to improve the facades of existing buildings in the City; and WHEREAS, the Authority wishes to revise the policies and procedures of the Program (the "Policies and Procedures") to provide financial assistance in the form of forgivable loans pursuant to Minnesota Statutes Section 469.192; and NOW, THEREFORE BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority (the "Authority") as follows: 1. The Authority hereby approves the Policies and Procedures in substantially the form presented to the Board. 2. The Authority authorizes all actions necessary to carry out the Policies and Procedures and implement the Program. Approved this 9th day of November, 2022, by the Board of Commissioners of the City of Monticello Economic Development Authority. President ATTEST: Executive Director MN325\40\836814.v1 TY OF Monticello MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY DOWNTOWN FACADE IMPROVEMENT CR A N;TFORGIVABLE LOAN PROGRAM GUIDELINES AMENDED ""*'rarR11T 17NOVEMBER 9, 2022 POLICY PURPOSE The City of Monticello Economic Development Authority ("EDA") recognizes the need to encourage investment in commercial and retail buildings in the Downtown area in order to maintain the economic viability of the City and the Downtown/Central Community District. The purpose of this grai#forgivable loan program is to support a visually and financially appealing Downtown and greater Monticello community by providing grantforgivable loans to improve the fagades of existing Downtown commercial and retail buildings. ELIGIBLE BUSINESSES Commercial property located within the geographic area illustrated in Exhibit A of these guidelines may be eligible for a Downtown Facade Improvement GrantForgivable Loan ("(;rant Loan") as further defined herein. The area illustrated in Exhibit A of these guidelines is amended to include the buildings to remain on Block 52 following redevelopment. It is the goal of the EDA that 70% of the buildings within the eligible area complete improvements to their properties. The EDA has allocated a maximum of $2050,000 for the initial GrantLoan program. This is a pilot program, and additional areas and allocations will be considered at a future date. GR N-TFORGIVABLE LOAN FUND TERMS & CONDITIONS Grant Loan Stu+e-€-Amount * Structure Individual grant loans may be made in an amount ranging from $5,000450,000. Forgiveness of a loan generally takes place over a five-year period with twentypercent (20%) of the award Formatted: Not Highlight forgiven annually. The EDA may extend or reduce the forgiveness period based on the dollar amount of the loan. If the benefitting building is sold within the period of the loan, the loan must be repaid— _The GranteeApplicant must provide at least 5% of the project cost in cash. The GranteeAvnlicant percentage shall be used as the project down -payment, as may be required. Eligibility Requirements Tenants and property owners should discuss the grant Loan program to determine 1 I Page responsibilities and commitment for application and its components. The owner of the property must be a cosignatory to the application and Grant Loan agreement. 2 1 P a g e The property owner must carry current property insurance both at the time of application and through completion of approved GrantLoan improvements. Property taxes on the subject site must be current for the duration of the GraFtIoan. Applicants are not eligible to receive funding if the property to be rehabilitated is in default under a property mortgage, contract for deed or comparable obligation. An applicant/property owner is ineligible to receive assistance if currently involved in bankruptcy proceedings. Applicants may apply for only one GrantLoan per building. The EDA reserves the right to approve or reject applications on a case -by -case basis, taking into Formatted: Font: Palatino Linotype consideration factors considered appropriate by the EDA, in addition to established polices, Formatted: Normal, Indent: Left: 0" ....------ r------- � ........ ... � � _l Formatted: Font: Palatino Linotype application will be approved. Approval or denial of an application is at the sole discretion of the E Formatted: Font color: Blue Concurrent &rants €fLoans The concurrent use of different EDA grand or oan programs by any one_ borrower or for any one project is permitted. Business subsidy agreements may be required. Permitted Cw*"Loan Uses Exterior renovation of front and corner side fagades of principal use retail or commercial buildings. An architectural rendering supplied by one of the following is required: an EDA selected architect, applicant contractor or architect, or a qualified architect accepted by the EDA. This item is required for use in determining final scope of work in consultation with the applicant and the applicant's selected contractor for any project. The cost of the rendering shall not be included in the GrantLoan amount. Architectural renderings will be considered for preparation after initial letter of interest by an applicant. Fagade renovation may include, but is not limited to: windows, doors, siding, brick, stucco, masonry, painting, steps, cornices, parapets, shutters, dormers, signage, awnings, and structural roof components and such improvements shall be guided by the architectural rendering - Interior side renovation proposals may be considered on a case -by -case basis. The applicant will work with a contractor to define final selected improvements using the architectural rendering as a guide. The architectural rendering with final selected improvements must be reviewed and approved by the EDA and will be included in final Grant_ Loan documentation. The improvements must be completed in substantial conformity to the approved architectural rendering. NIN325\40\836794.v1 3 1 P a g e The cost of the building permit for the approved C-r-ant Loan project will be included in the final C anELoan amount. 41Page CONSTRUCTION AND IMPROVEMENTS CODE COMPLIANCE As applicable, buildings for which public funds will be used within this program are to be brought into conformity with city ordinances and state building codes in effect for the area in which the building is located. It is the intent of the Downtown Fagade Improvement GrantLoan Program to comply with the City's building standards for the Downtown/Central Community District (CCD). Please refer to the City's Downtown Small Area Plan and zoning ordinance for complete details as it relates to the standards governing this program's design guidelines. TIMING OF PROJECT EXPENSES No project may commence until the EDA has approved the GrantLoan application and the GrantLoan agreement. Any costs incurred prior to execution of the C+aRtLoan agreement are not eligible expenditures. No building construction may commence until the required city permits are secured. GrantLoan disbursements shall be as provided for within the Gr-antLoan agreement and shall be made directly to the granteeApplicant owner's contractor. The GrantLoan agreement shall reference final contracts for improvements. COMMUNICATION Success of the project depends on the completeness of applications and good communication between all parties. Applicants should feel free to reach out to EDA staff with any questions at any time. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL The applicant shall meet with city staff to obtain information about the GrantLoan program, discuss the project, and obtain application forms. The applicant shall complete and submit a letter of interest to the EDA. After review, the EDA will consider authorization of the facade rendering by the EDA's architectural consultant. Once the architect and applicant have completed the rendering process, the applicant must submit a formal application to the EDA for review. Applications will be received and reviewed on a first -come, first -served basis from the time of submission of a complete application. An inspection of the building may be required. NIN325\40\836794.v1 5 1 P a g e The EDA is a governmental entity and as such must provide public access to public data it receives. Data deemed by Applicant to be nonpublic data under State law should be so designated or marked by Applicant. See Minnesota Statutes, Section 13.591, Subd. 1 and 2. The formal graatLoan application will be reviewed by EDA staff to determine if it conforms to all city policies and ordinances, and will be presented to the EDA for formal approval, as follows: 1. Staff will complete a preliminary application review and may consult with the EDA's Financial Advisor and/or EDA Attorney in preparing a report for EDA consideration. 2. Staff will evaluate the project application in terms of the following: a. Project Design - Evaluation of project design will include review of proposed activities, project construction and renovation plans including architectural rendering and final building elevations detailing selected improvements, timelines and capacity to implement the project. b. Financial Feasibility - Availability of funds, private investment, financial packaging and cost effectiveness, and bid -quote submissions. c. Evidence of applicant's ability to meet the 5% cash requirements. d. Letter of Commitment from other financing sources stating terms and conditions of their participation in the project, if applicable. e. All other information as required in the application and/or additional information as may be requested by the EDA staff. f. Project compliance with all applicable city codes and policies. 3. The EDA Commissioners will review each application in terms of: a. Its consistency with the goals of the city's Comprehensive Plan and Downtown Small Area Study. b. Whether it is desirable and in the best interests of the public to provide funding for the project. c. The project's overall potential impact on the community's economy. 4. The EDA Commissioners will approve or deny the application, or request a resubmission with clarifications, at the EDA's sole discretion. APPROVAL OR DENIAL OF GRANT -LOAN APPLICATION The EDA, at its sole discretion, may deny any application on a case -by -case basis, taking into consideration factors such as: consistency with if it is found net eansistent iyiith the goals of the city's Comprehensive Plan and Downtown Small Area Study, the project's overall impact on the community's economy, and the above criteria. GRANTLOAN POLICY REVIEW The above criteria will be reviewed on an annual basis to ensure that the policies reflected in this document are consistent with the economic development goals set forth by the city. NIN325\40\836794.v1 6 1 P a g e COMPLIANCE WITH BUSINESS SUBSIDY LAW All developersibusinesses receiving financial assistance from the City of Monticello EDA shall be subject to the City's Business Subsidy Policy as amended, and the provisions and requirements set forth under Minnesota Statutes, Sections 116J.993 to 116J.995. GRANT -LOAN AGREEMENT If the application for a Gran Loan is approved, the applicant/property owner will be required to enter into a GFaPALoan agreement to proceed. The Gran Loan agreement will specify the terms and conditions of the Gran Loan as identified herein. DISBURSEMENT OF r R A NTLOAN FUNDS Upon approval of a GrantLoan application, applicants are required to provide executed contracts with qualified, licensed contractors for work per the approved GrarttLoan plans. Contracts shall be consistent with the procedures and requirements herein. GrantLoan funds will be disbursed to the contractor based on completion of work as outlined below. The City's Chief Building Official will verify completion of work. Upon verification of completion, payment will be dispersed per contract amount for the work completed based on submitted invoice. PROJECT CONTRACTOR PROCEDURES AND REQUIREMENTS A. PARTICIPATING CONTRACTORS: All contractors participating in the Downtown Facade Improvement GFaRtLoan Program must have a contractor's license on file with the Minnesota Department of Labor and Industry. The contractors will be responsible for securing insurance of the amounts specified on the application form. The application must contain proof of insurance coverage via a Certification of Insurance Coverage, and the contractor's registration and license number and bond. B. BID/QUOTE SOLICITATION: To participate in the Downtown Fagade Improvement G&afftl oan Program, the applicant must solicit bids or quotes from at least two vendors. An applicant is free to choose any contractor, provided the license requirements are met and the cost differential in the quotes received does not exceed 20%. C. CONTRACTOR CONTRACT: The contract for work is between the property owner (applicant) and the contractor. Each selected contractor will enter into a contract with the property owner. The contract will outline the terms for completion of the rehabilitation on the project and will include the following: 1. Scope of Work 2. Project Start Date; MN325\40\836794.v1 7 1 P a g e 3. Project Completion Date, 4. General Conditions; 5. Building Elevations and Architectural Drawings; 6. Special Conditions; 7. Project Warranties; 8. Change Order Procedures; 9. Payment Terms; 10. Termination Procedures. D. FAILURE TO START/COMPLETE PROJECT: Upon approval of the Gran4Loan agreement, the applicant and selected contractor will have 180 calendar days in which to complete the contracted work. The 180-day time period shall not be exceeded except through the issuance of a change order. Failure to complete any work within 180 days will be grounds to terminate the GfantLoan agreement. E. PAYMENT PROCEDURES: All contractors will agree to the payment schedule, which is as follows: 1. Pre -payments for contracted services may be disbursed from an escrow account established with the EDA's specified agency. Such escrow account shall be administered per the G*aRtLoan agreement. 2. Lien waivers are required for all contractors and sub -contractors before payment will be made. 3. Final payment for work completed, including any retainage amounts, will be made after work by a contractor is completed with verified receipts and costs incurred, the final inspection has been conducted and the Chief Building Official, property owner, and contractor have signed off on the work. F. CHANGE ORDERS: Change orders to the approved GLoan project require the approval of the EDA. Change orders will be allowed only for the following reasons: 1. To rectify hidden deficiencies that are discovered once the work has begun. 2. To change a specification due to unforeseen difficulties arising after work has begun. 3. To address a deficiency that was inadvertently dropped from the project during project packaging. 4. To change completion dates. NIN325\40\836794.v1 8 1 P a g e PROJECT COMPLETION The City's Chief Building Official will complete a final project inspection and issue a Certificate of Completion verifying project completion per the approved Loan plans. 91Page EXHIBIT A Geographic Program Limits Downtown Fa4ade Improvement Grant Program Eligibility Area Created by: City of Monti ce l la MN325\40\836794.v1 EXHIBIT B Permitted Fund Uses — Visual Reference MN325\40\836794.v1 MN325\40\836794.v1 Elements of the Facade Cornice— Upper Frieze- Lintel l Upper Windows Sill ------- Middle Frieze---;W,. - - Transom ---- ti as Door-.... Display Window Base Panel MN325\40\836794.v1 Overview of the Program The Monticello EDA has developed a Downtown Facade Im- provement GrantLoan Program to support property owners in their efforts to reinvest in their buildings and in the historic building fabric of downtown Monticello. The purpose of the gfant oan pro- gram is to improve the aesthetics of the Downtown and to make it a place that is comfortable and appealing to more people throughout the day, week and year. The gfaratloan program offers up to $50,000 in gfaf#loan funding to individual building property owners or building tenants to make front and corner side building fac;ade improvements in the eligi- ble area shown below. The funds are provided as foraivable loans. with the loans generally forgiven over a 5-year period with 20% of the principal amount forgiven each year. repayment of the funds re quired, with a minimal finaRGial __...n,itment by then norty ewner er tenant The EDA's goal is for at least 70% of the proper- ty owners in the area to take advantage of the Moan, Additional Information www.ci.monticello.mn.us Angela Schumann Director of Community Development LY i a t9 *it7 J. Z _, -Z �A l> - </ lhjo Downtown Facade Improvement Gran Loan Program An Implementation Step of the Downtown Small Area Plan Investing in Our Downtown CITY OF Formatted: Font color: Custom Color(RGB(35,35,35)), Character scale: 105% City of Monticello, MN 763-271-3224 Angela.Schumann@ci.monticello.mn.us Possible Improvements to building on Broadway MN325\40\836794.v1 Monticello Monticello Design Threads The following design threads can be incorporated into facade improvements. Doing so will help create a lively and distinctive environment. Transparency and Openness Broadway should be welcoming and inviting. Facades with large windows and well -designed storefronts are comfortable to walk along side and intriguing to look ime.They They create visual interest to both drivers and walkers. Three Dimensionality/ Movement Functional and artistic elements that have depth, or evoke a sense of movement, have impact. Elements that project horizontally from buildings or vertically from the sodp ;;;sidewalk are encouraged. Proportion and Order All elements of the facade should be proportional and orderly to create a harmonius composition. The underlying building should provide the basic order of the composition and ele- ments such as awnings, signage and lighting should respond to the underlying building. Of its Time Downtown Monticello was bu#built over time. Today's buildings reflect a variety of eras and no one particular style. Improvements --gists to the buildings that are in keeping with the spirit of a particular era will create an environment that is of its time. South side of Broadway, Block 36 —.— -- ' �� ��' t �� •� ,� iii I MN325\40\836794.v1 General Design Considerations A renovation or fac-ade improvement project can provide the architectural and human -scale qualities to improve the aesthet- ics of Downtown. The following design considerations highlight key elements that will provide guidance in restoring or enhanc- ing architectural value to building. - Most facades consist of an architectural framework designed to identify individual storefronts. Each storefront should respect this framework. - Facades should present a visually balanced composition ac- cording to the original architectural intent. - In cases where original building elements have been removed or substantially altered, contemporary treatments respecting the original and historic details are suitable. Heave e However, they should not appear to be of poor quality, of temporary nature, or ill -suited for the area (vinyl or aluminum &kliR - If a building has historic or architectural merit, improvements should be designed to reveal the buildings original style form and materials, whenever pesisbleggssible. - Architectural services will be offered at no charge to grantloan fund applicants. Facade Improvement Possibilities paint and signage corner treatments integrated signage restored brickwork murals welcoming fronts 1—t-1-�,. r_ Sample Illustration MN325\40\836794.v1 EDA Agenda — 11 /09/22 7. Consideration of Resolution No. 2022-35 Approving an Assignment and Assumption of Purchase and TIF Development Contract (TIF District 1-43) and Assignment of Tax Increment Financing Note by Headwaters Development, LLC, to Monticello Townhomes CHC, LLC related to a proposed residential development at the Country Club Manor Second Addition (JT) A. REFERENCE AND BACKGROUND The EDA is asked to adopt Resolution No. 2022-35 approving an Assignment and Assumption of the Purchase and TIF Development Contract between Headwaters Development, LLC, and the EDA to Monticello Townhomes CHC, LLC for the rental twinhome portion of the development at the Country Club Manor Second Addition plat. The Assignment document transfers the TIF Development Contract obligations, rights and responsibilities related to the twinhome residential development to Monticello Townhomes CHC, LLC. The Assignment and Assumption document was prepared by the private parties involved in the proposed transaction and reviewed and final edited by the EDA attorney. The Assignment document will not impact the original TIF plan, as adopted, for TIF District 1-43. The assignment specifies that all of the terms, conditions, and requirements of the original Purchase and TIF Development Contract remain in place, including the requirement that the units be for affordable senior housing. Development activities at the site have not commenced. Headwaters Development would like to close on the land purchase transaction with the EDA on or about November 10, 2022. The Assignment and Assumption document also includes language relating to the City Development and PUD Contract. This means the document will require City Council approval as well. The Assignment and Assumption document can be presented to the City Council at the November 14, 2022 meeting. This will delay a second land transaction closing between Headwaters Development and Monticello Townhomes CHC, LLC wherein the vacant parcel transfer and TIF Development Agreement Assignment takes place until November 15, 2022 or later. Full development of the 60-unit rental twinhomes, including grading, roads, utilities and building construction may take 18 to 20 months. The projected development cost is approximately $20,500,000. The first TIF collections from the new development value are projected to begin in 2025. As a reminder, the EDA approved the Purchase and TIF Development Agreement with Headwaters Development at its June 8, 2022 meeting. TIF District 1-43 was authorized to be established as a 26-year Affordable Housing District by the City Council and EDA in early 2022 (February 14 and February 23 respectively) to support the development proposal. The TIF Development Agreement requires 40 percent of the units (24 units) to be made available to households with incomes at or below 60 percent of the area median income (AMI). Wright County income thresholds are used as basis for determining household eligibility. Al. Budget Impact: There is a minimal budget impact to the EDA related to the Consideration of the Assignment and Assumption Agreement. The EDA attorney has reviewed the Assignment Agreement. Legal fees for reviewing and editing the Assignment document will be invoiced to Headwaters Development, LLC, and Monticello Townhomes, CHC, LLC. A2. Staff Workload Impact: An estimate of 18 to 22 hours of staff time has been committed in research and communication tasks as well as in reviewing and editing the Assignment and Assumption Agreement. A3. Comprehensive Plan Impact: The Vision adopted as part of the Monticello 2040 Plan is to create a friendly and safe community which is inclusive and fosters a sense of belonging. The city has adopted a strategy for housing which includes developing a range of housing choice and opportunity. As residents move through their career paths and family status, their housing needs change. As an actively developing community, Monticello seeks to provide opportunities for a full range of "life cycle" housing options allowing them to stay and grow with our community. This proposal meets a specific housing need in the community, which is further supported by the 2020 Housing Study. The proposed project also meets the Monticello 2040 goal for growing from within, as it is also located within the city on an underutilized parcel of land. B. ALTERNATIVE ACTIONS 1. Motion to adopt Resolution No. 2022-35 approving the Assignment and Assumption Agreement, assigning, and transferring the Purchase and Development Contract for TIF District 1-43 and Assignment of Tax Increment Financing Note by Headwaters Development, LLC to Monticello Townhomes CHC, LLC as related to the rental twinhome development of Country Club Manor Second Addition. 2. Motion to table consideration of Resolution No.2022-35 for further research and/or discussion. C. STAFF RECOMMENDATION Staff recommends Alternative #1. An Assignment of the TIF Development Contract requires EDA approval. As the Purchase and Development Agreement with Headwaters is currently written, the EDA ("Authority") is entitled to require that "any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement and the Purchase Price Note by the Developer", Section 8.2. Specifically, in approving the Assignment, the EDA is concurring with the proposed transfer agreement that has been crafted between Headwaters Development and Monticello Townhomes CHC, LLC, allowing the development project to move forward. Monticello Townhomes CHC, LLC is a related entity to Community Housing Corporation (CHC), LLC. The St. Paul based non-profit owns and manages multi -family and assisted living housing properties in several states. CHC's Executive Director, Wes Butler, will attend the EDA meeting to provide a summary of CHC's capacity to complete the development and manage the housing in the future. Staff have been informed that Headwaters Development will be involved in the development and construction process through a management arrangement. A TIF Application was completed by CHC and is attached as Exhibit E. Information from the CHC website is also included in Exhibit F. D. SUPPORTING DATA A. EDA Resolution No. 2022-35 B. Assignment and Assumption Agreement C. Purchase and Development Agreement (TIF 1-43) D. Illustration of Twin homes Development E. CHC TIF Application Packet F. Information from CHC website CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 2022-35 RESOLUTION APPROVING AN ASSIGNMENT AND ASSUMPTION OF PURCHASE AND DEVELOPMENT CONTRACT AND ASSIGNMENT OF TAX INCREMENT FINANCING NOTE BY HEADWATERS DEVELOPMENT LLC TO CHC MONTICELLO TOWNHOMES LLC WHEREAS, the City of Monticello, Minnesota (the "City") and the City of Monticello Economic Development Authority (the "Authority") have previously established the Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project) (the "TIF District"), a housing district, within the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project"), pursuant to Minnesota Statutes, Sections 469.001 through 469.047, Sections 469.090 through 469.1081, and Sections 469.174 through 469.1794, all as amended; and WHEREAS, the Authority previously approved providing certain financial assistance, including tax increment financing assistance in the form of the tax increment financing note (the "TIF Note") to Headwaters Development LLC, a Minnesota limited liability company (or certain affiliates thereof, collectively, the "Developer"), pursuant to a Purchase and Development Contract (the "Agreement") between the Developer and the Authority, in order to facilitate the Developer's acquisition of property within the TIF District (the "Development Property") and construction thereon of approximately 60 rental housing units for seniors with attached two -car garages (the "Project"); and WHEREAS, the Developer has requested that the Authority consent to an Assignment and Assumption of Development Agreement (the "Assignment") by and between the Developer and CHC Monticello Townhomes LLC, a Minnesota limited liability company (the "Assignee"), which includes the assignment of the TIF Note, by executing a Consent to Assignment and Assumption Agreement (the "Consent"), the form of which is on file with the Authority. Now, therefore, be it resolved by the Board of Commissioners (the "Board") of the City of Monticello Economic Development Authority as follows: 1. The Board hereby approves the Assignment and the Consent in substantially the forms presented to the Board, together with any related documents necessary in connection therewith, including but not limited to the agreements referred to therein (collectively, the "Assignment Documents"), and hereby authorizes the President and Executive Director to execute any such Assignment Documents to which the Authority is a party, on behalf of the Authority, and to carry out, on behalf of the Authority, the obligations of the Authority thereunder when all conditions precedent thereto have been satisfied. 2. The approval hereby given to the Assignment 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 officers authorized herein or by the Authority to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the Authority. The execution of any instrument by the appropriate officers of the Authority shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the 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 City Attorney, may act in their behalf. 3. Upon execution and delivery of the Assignment Documents, the officers and employees of the Authority are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the Authority to implement the Assignment Documents, when all conditions precedent thereto have been satisfied, including without limitation the payment of tax increments to the Assignee as provided therein. 4. The Board hereby determines that the execution and performance of the Assignment Documents will help realize the public purposes of the Act. Approved by the Board of Commissioners of the City of Monticello Economic Development Authority on November 9, 2022. President ATTEST: Executive Director 2 SA285\136\812392.v1 ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT CONTRACTS November , 2022 Headwaters Development LLC, a Minnesota limited liability company ("Original Developer"), and the City of Monticello Economic Development Authority, a public body corporate and politic and a political subdivision under the laws of the State of Minnesota (the "("Authority"), are the parties to the Purchase and Development Contract dated November 2022 (the "Agreement") under which Original Developer, as the "Developer", has the right to develop the property in Monticello, Minnesota that is legally described in Exhibit A to this Assignment. The property is planned to be developed as 60 rental twin home housing units for seniors with attached two -car garages. Original Developer is also the "Developer" under the Development Contract and Planned Unit Development Agreement dated November _, 2022 (the "Development Contract") between Original Developer and the City of Monticello, a Minnesota municipal corporation (the "City"), which governs the zoning and development of the twinhome project. 1. Assignment. Original Developer hereby assigns, conveys, and transfers to CHC Monticello Townhomes LLC, a Minnesota limited liability company ("New Developer"), all of Original Developer's rights, title, and interest in, to, and under: (a) the Agreement, including the right to be issued the TIF Note as identified in the Agreement subject to the all terms and conditions set forth therein ; (b) the Development Contract; and (c) the building permit application for the twinhome project that Original Developer submitted to the City. 2. Assumption. New Developer hereby assumes and agrees, for the benefit of Original Developer, the Authority, and the City, to perform all of the "Developer's" rights, obligations, and liabilities under the Agreement and the Development Contract, including but not limited to the Developer's obligations to deliver and perform its obligations under the "Purchase Price Note" described in Section 3.2 of the Agreement. New Developer hereby agrees to faithfully abide by, perform, and discharge each and every term, covenant, and condition of the Agreement and the exhibits thereto applicable to the "Developer" first arising from and after the date of this Assignment and to be fully bound by all of the foregoing. 3. Representations by New Developer. New Developer hereby represents to Original Developer, the Authority, and the City that New Developer is a limited liability company duly organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its organizational documents or the laws of the State of Minnesota, is duly authorized to transact business within Minnesota, has the power to enter into this Assignment, and has duly authorized the signing, delivery, and performance of this Assignment by proper action of its governing members. 4. Authority Consent. The Authority hereby consents to the assignment and assumption of the Agreement under this Assignment, accepts New Developer as the Developer under the Agreement, and releases Original Developer from the obligations and liabilities of the Developer under the Agreement. 1 Error! Unknown document property name. 5. City Consent. The City hereby consents to the assignment and assumption of the Development Contract and the building permit application under this Assignment, accepts New Developer as the Developer under the Development Contract and the applicant under the building permit application, and releases Original Developer from the obligations and liabilities of the Developer under the Development Contract. 6. Signing and Delivery. The parties agree that this Assignment may be signed electronically and in counterparts and may be delivered by email or other electronic transmission, and they agree to be bound by such signing and delivery. Signature Pages Follow 2 Error! Unknown document property name. Signature Page to Assignment and Assumption of Development Contracts Original Developer: Headwaters Development LLC Michael J. Hoagberg, its manager New Developer: CHC Monticello Townhomes LLC By: Name: Title: Authority: City of Monticello Economic Development Authority By: Steve Johnson, President and By: Jim Thares, Executive Director City: City of Monticello By: Lloyd Hilgart, Mayor and 1.2 Rachel Leonard, City Administrator 3 Error! Unknown document property name. EXHIBIT A Legal Description of Twinhome Project Land The real property in the City of Monticello, County of Wright, State of Minnesota, legally described as follows: Lots 1-21, Block 1, Country Club Manor Second Addition Lots 1-11, Block 2, Country Club Manor Second Addition Lots 1-11, Block 3, Country Club Manor Second Addition Lots 1-21, Block 4, Country Club Manor Second Addition Outlot A, Country Club Manor Second Addition Outlot B, Country Club Manor Second Addition Outlot C, Country Club Manor Second Addition Error! Unknown document property name. PURCHASE AND DEVELOPMENT CONTRACT By and Between CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY and HEADWATERS DEVELOPMENT LLC Dated as of: June 8, 2022 This document was drafted by: KENNEDY & GRAVEN, Chartered (GAF) 150 South 5th Street, Suite 700 Minneapolis, MN 55402 Telephone: (612) 337-9300 TABLE OF CONTENTS PREAMBLE............................................................................................................................1 ARTICLE I Definitions Section1.1. Definitions..........................................................................................................3 ARTICLE II Representations and Warranties Section 2.1. Representations and Warranties by the Authority.............................................7 Section 2.2. Representations and Warranties by the Developer............................................7 ARTICLE III Conveyance of Property; TIF Assistance Section 3.1. Conveyance of the Development Property......................................................... 9 Section 3.2. Purchase Price; Provisions for Payment; and Fees ............................................. 9 Section 3.3. Representation and As Is Conveyance................................................................ 9 Section3.4. Title...................................................................................................................10 Section 3.5. Contingencies to Closing on Development Property ........................................ I I Section3.6. Closing..............................................................................................................13 Section 3.7. Conveyance Subject to Right of Re-entry........................................................14 Section 3.8 Advance of Purchase Price Note and Other Costs; Tax Increment Purchase Price Note...................................................................................................................14 Section 3.9. Reimbursement of Public Development Costs; Issuance of TIF Note .............14 Section 3.10. No Business Subsidy.........................................................................................16 Section 3.11. Payment of Administrative Costs.....................................................................16 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements.......................................................17 Section 4.2. Construction Plans...........................................................................................17 Section 4.3. Commencement and Completion of Construction...........................................18 Section 4.4. Certificate of Completion................................................................................19 Section 4.5. Records and Reports........................................................................................19 Section4.6. Income Limits..................................................................................................19 ARTICLE V Insurance Section5.1. Insurance..........................................................................................................21 Section5.2. Subordination...................................................................................................22 MN190\163\801191.v1 ARTICLE VI Delinquent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes...................................................................23 Section 6.2. Review of Taxes..............................................................................................23 ARTICLE VII Financing Section7.1. Financing..........................................................................................................24 Section 7.2. Authority's Option to Cure Default on Mortgage............................................24 Section 7.3. Subordination and Modification for the Benefit of Mortgagee .......................24 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development...................................................................25 Section 8.2. Prohibition Against Developer's Transfer of Property and Assignmentof Agreement...............................................................................25 Section 8.3. Release and Indemnification Covenants..........................................................26 ARTICLE IX Events of Default Section 9.1. Events of Default Defined................................................................................ 28 Section 9.2. Remedies on Default......................................................................................... 28 Section 9.3. No Remedy Exclusive....................................................................................... 28 Section 9.4. No Additional Waiver Implied by One Waiver ................................................ 29 Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 10.5. Section 10.6. Section 10.7. Section 10.8. Section 10.9. Section 10.10. Section 10.11. Section 10.12. ARTICLE X Additional Provisions Conflict of Interests; Authority Representatives Not Individually Liable ....... 30 Equal Employment Opportunity......................................................................30 Restrictions on Use..........................................................................................30 Provisions Not Merged With Deed..................................................................30 Titles of Articles and Sections.........................................................................30 Noticesand Demands......................................................................................30 Counterparts.....................................................................................................31 Recording.........................................................................................................31 Amendment...................................................................................................... 31 AuthorityApprovals........................................................................................31 Termination...................................................................................................... 31 Choice of Law and Venue................................................................................31 MN190\163\801191.v1 SCHEDULE A Description of Development Property SCHEDULE B Form of Quit Claim Deed SCHEDULE C Form of Purchase Price Note SCHEDULED Certificate of Completion SCHEDULE E Form of Income Verification SCHEDULE F Resolution Approving Contract and TIF Note SCHEDULE G Description of Apartments Property (The remainder of this page is intentionally left blank.) MN190\163\801191.v1 PURCHASE AND DEVELOPMENT CONTRACT THIS AGREEMENT, made as of the 81h day of June, 2022, by and between the CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and a political subdivision under the laws of the State of Minnesota (the "Authority"), and HEADWATERS DEVELOPMENT LLC, a Minnesota limited liability company (the "Developer"). WITNESSETH: WHEREAS, the Housing and Redevelopment Authority in and for the City of Monticello (the "HRA") has undertaken a program to promote economic development and job opportunities and to promote the redevelopment of land which is underutilized within the City of Monticello, Minnesota (the "City"), and in this connection created the Central Monticello Redevelopment Project No. 1 (the "Redevelopment Project") pursuant to Minnesota Statutes, Sections 469.001 through 469.047, as amended (the "HRA Act"), and adopted a redevelopment plan for the Redevelopment Project; and WHEREAS, the Authority was established pursuant to Minnesota Statutes, Sections 469.090 to 469.1081, as amended (hereinafter referred to as the "Act"), and was authorized to transact business and exercise its powers by a resolution of the City Council of the City, which also transferred the control and responsibility for the Redevelopment Project from the HRA to the Authority; and WHEREAS, pursuant to its powers under Minnesota Statutes, Sections 469.090 to 469.1081 (the ` EDA Act") and the HRA Act, the Authority is authorized to acquire real property, or interests therein, and to undertake certain activities to facilitate the development of real property by private enterprise; and WHEREAS, the Authority has acquired or will acquire certain property described in Schedule A (the "Development Property") within the Redevelopment Project, and intends to convey that property to the Developer for development of certain improvements described herein; and WHEREAS, the Authority and City have approved a Tax Increment Financing Plan and a Modification to the Tax Increment Financing Plan (collectively, the "TIF Plan") for Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project) (the "TIF District"), a housing district within the Redevelopment Project, pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended (the "TIF Act"); and WHEREAS, pursuant to the Act, the Authority is authorized to undertake certain activities to facilitate the redevelopment of real property by private enterprise; and WHEREAS, the Authority intends to convey the Development Property to the Developer for the purposes of constructing approximately 60 rental housing units for seniors with attached two -car garages on the Development Property (the "Minimum Improvements") in accordance with the terms hereof and has requested that the Authority provide certain financial assistance to assist the Developer MN190\163\801191.v1 with certain costs thereof in order to fill the gap between the total development costs and the funds available to pay such costs; and WHEREAS, the Authority believes that the development of the Development Property pursuant to this Agreement and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions of the applicable State and local laws and requirements under which the Redevelopment Project has been undertaken and is being assisted. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: 2 MN190\163\801191.v1 ARTICLE I Definitions Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means, collectively, the Economic Development Authority Act, Minnesota Statutes, Sections 469.090 to 469.1081, as amended, and the Housing and Redevelopment Authority Act, Minnesota Statutes, Sections 469.001 to 469.047, as amended. "Affiliate" means with respect to any entity (a) any corporation, partnership, limited liability company or other business entity or person controlling, controlled by, or under common control with the entity, and (b) any successor to such party by merger, acquisition, reorganization, or similar transaction involving all or substantially all of the assets of such party (or such Affiliate). For the purpose hereof the words "controlling", "controlled by," and "under common control with" shall mean, with respect to any corporation, partnership, limited liability company, or other business entity, the ownership of fifty percent or more of the voting interests in such entity or possession, directly or indirectly, of the power to direct or cause the direction of management policies of such entity, whether through ownership of voting securities or by contract or otherwise. "Agreement" means this Purchase and Development Agreement, as the same may be from time to time modified, amended, or supplemented. "Apartments Property" means the real property described in Schedule G of this Agreement. "Authority" means the City of Monticello Economic Development Authority, or any successor or assign. "Authority Representative" means the Executive Director of the Authority, or any person designated by the Executive Director to act as the Authority Representative for the purposes of this Agreement. "Authorizing Resolution" means the resolution of the Authority, substantially in the form of attached Schedule F to be adopted by the Authority to approve this Agreement and authorize the issuance of the TIF Note. "Certificate of Completion" means the certification in the form set forth in Schedule D and provided to the Developer pursuant to Section 4.4 of this Agreement. "City" means the City of Monticello, Minnesota. "Closing Date" or "Closing" means not later than September 30, 2022, or such other date as agreed to by the Authority and Developer on which the Authority will convey title to the Property to the Developer. MN190\163\801191.v1 "Construction Documents" shall mean the following documents, all of which shall be in form and substance acceptable to Authority: (a) evidence satisfactory to Authority showing that the Minimum Improvements conforms to applicable zoning, subdivision and building code laws and ordinances, including a copy of the building permit for the Minimum Improvements; (b) a copy of the executed agreement between owner and architect for architectural services for the Minimum Improvements, if any, and (c) a copy of the executed general contractor's contract for the Minimum Improvements, if any. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by the Developer on the Development Property which a) shall be as detailed as the plans, specifications, drawings, and related documents which are submitted to the appropriate building officials of the City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape plan; and (8) such other plans or supplements to the foregoing plans as the Authority may reasonably request to allow it to ascertain the nature and quality of the proposed construction work. "County" means the County of Wright, Minnesota. "Deed" means the Quit Claim Deed in the form attached hereto as Schedule B, to be executed by the City conveying the Development Property to the Developer. "Developer" means Headwaters Development LLC, a Minnesota limited liability company, or its permitted successors and assigns, as provided in Section 10.13 of this Agreement. "Development Property" means the real property described in Schedule A of this Agreement. "Event of Default" means an action by the Developer listed in Section 9.1 of this Agreement. "Minimum Improvements" means the construction by the Developer on the Development Property of approximately 60 rental housing units for seniors with attached two -car garages. "Mortgage" means any mortgage made by the Developer, which is secured, in whole or in part, with the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII of this Agreement. "Payment Date" means August 1 of the year commencing on August 1, 2025 and each February 1 and August 1 thereafter until the Termination Date. "Public Development Costs" has the meaning provided in Section 3.9(a) hereof. "Purchase Price Note" has the meaning provided in Section 3.3 hereof. "Purchase Price Note Available Tax Increment," means, on each Payment Date, 20.6% of the Tax Increment attributable to the Development Property and paid to the Authority by Wright County in the six (6) months preceding the Payment Date, after payment of the Authority's administrative costs. 4 MN190\163\801191.v1 "Redevelopment Plan" means the Authority's Redevelopment Plan for the Redevelopment Project, as amended through the date of this Agreement. No. 1. "Redevelopment Project" means the Authority's Central Monticello Redevelopment Project "State" means the State of Minnesota. "Tax Increment" means that portion of the real property taxes which is paid with respect to the Development Property and which is actually remitted to the Authority as tax increment pursuant to the Tax Increment Act. The term Tax Increment does not include any amounts retained by or payable to the State auditor under Section 469.177, subdivision 11 of the Tax Increment Act. "Tax Increment Act" or "TIF Act" means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1794, as amended. "Tax Increment District" or "TIF District" means the Authority's Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project). "Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing Plan for the TIF District, as approved by the Authority on February 23, 2022, and by the City on February 14, 2022, and as modified by the Modification to the Tax Increment Financing Plan for the Tax Increment Financing District No. 1-43 (Headwaters Villas Project), as approved by the Authority on June 8, 2022, and by the City on May 23, 2022, and as may be amended from time to time. "Tax Official" means any County assessor; County auditor; County or State board of equalization, the commissioner of revenue of the State, or any State or federal district court, the tax court of the State, or the State Supreme Court. "Termination Date" means the later of (a) date of the Authority's last receipt of Tax Increment from the TIF District in accordance with Section 469.176, subdivision lb(3) of the TIF Act; (b) the date the Purchase Price Note has been paid in full, defeased, or terminated in accordance with the terms of the resolution set forth in Schedule C; or (c) the date the TIF Note has been paid in full or terminated in accordance with the terms of this Agreement. "TIF Note" means the Taxable Tax Increment Revenue Note (Headwaters Villas Project), substantially in the form contained in the Authorizing Resolution, to be delivered by the City to the Developer in accordance with Section 3.9(a) hereof. "TIF Note Available Tax Increment," means, on each Payment Date, 79.4% of the Tax Increment attributable to the Development Property and paid to the Authority by Wright County in the six months preceding the Payment Date, but solely to the extent payable on such Payment Date pursuant to the TIF Note. TIF Note Available Tax Increment shall not include any Tax Increment if, as of any Payment Date, there is an uncured Event of Default under this Agreement. 5 MN190\163\801191.v1 "Title Company" means Guaranty Commercial Title, Inc., as the agent for Old Republic National Title Insurance Company, or other title company designated by the Developer in connection with the acquisition of the Development Property. "Transfer" has the meaning set forth in Section 8.2(a) hereof. "Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor troubles, prolonged adverse weather or acts of God, fire or other casualty to the Minimum Improvements, a pandemic or epidemic, but not including the effects of the current Covid-19 pandemic that are reasonably foreseeable on the date of this Agreement, litigation commenced by third parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal, state, or local governmental unit (other than the Authority in exercising its rights under this Agreement) which directly result in delays. Unavoidable Delays shall not include delays in the Developer's obtaining of permits or governmental approvals necessary to enable construction of the Minimum Improvements by the dates such approvals and construction is required under Sections 4.2 and 4.3 of this Agreement. (The remainder of this page is left intentionally blank.) 6 MN190\163\801191.v1 ARTICLE II resentations and Warranties Section 2.1. Representations and Warranties by the Authority. The Authority makes the following representations and warranties: (a) The Authority is an economic development authority duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The activities of the Authority are undertaken to foster the development and redevelopment of certain real property which for a variety of reasons is presently underutilized, to create increased tax base in the City, to increase affordable housing opportunities in the City, and to stimulate further development of the TIF District and Redevelopment Project as a whole. (c) The Authority makes no representation or warranty, either express or implied, as to the Development Property or its condition, or that the Development Property shall be suitable for the Developer's purposes or needs. (d) No member of the Board of Commissioners of the Authority, or officer of the Authority, has either a direct or indirect financial interest in this Agreement. Section 2.2. Representations and Warranties by the Developer. The Developer represents and warrants that: (a) The Developer is a limited liability company duly organized and in good standing under the laws of the State of Minnesota, is not in violation of any provisions of its organizational documents or the laws of the State, is duly authorized to transact business within the State, has power to enter into this Agreement and has duly authorized the execution, delivery, and performance of this Agreement by proper action of its governing members. (b) If the Developer acquires the Development Property in accordance with this Agreement, the Developer will construct, operate, and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all applicable local, state, and federal laws and regulations (including, but not limited to, environmental, zoning, building code, labor, and public health laws and regulations). (c) The Developer has received no actual notice or communication from any local, state, or federal official that the activities of the Developer or the Authority in the Redevelopment Project may be or will be in violation of any environmental law or regulation (other than those notices or communications of which the Authority is aware). The Developer is not actually aware of any facts the existence of which would cause it to be in violation of or give any person a valid claim under any local, state, or federal environmental law, regulation, or review procedure. 7 MN190\163\801191.v1 (d) The Developer will make reasonable efforts to obtain, in a timely manner, all required permits, licenses, and approvals, and will make reasonable efforts to meet, in a timely manner, all requirements of all applicable local, state, and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement is prevented, limited by, or conflicts with or results in a breach of, the terms, conditions or provisions of any corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing. (f) Whenever any Event of Default occurs and if the Authority shall employ attorneys or incur other expenses for the collection of payments due or to become due or for the enforcement of performance or observance of any obligation or agreement on the part of the Developer under this Agreement, and the Authority prevails in such action, the Developer agrees that it shall, within thirty (30) days of written demand by the Authority, pay to the Authority the reasonable fees of such attorneys and such other expenses so incurred by the Authority. (g) The proposed development by the Developer hereunder would not occur but for the tax increment financing assistance being provided by the Authority hereunder. (h) The Developer understands that the Authority and the City may subsidize or encourage the development of other developments in the City, including properties that compete with the Development Property and the Minimum Improvements, and that such subsidies may be more favorable than the terms of this Agreement, and that neither the Authority nor the City has represented that development of the Development Property will be favored over the development of other properties. (i) The Developer represents that no more than twenty percent (20%) of the square footage of the Minimum Improvements will consist of commercial, retail or other nonresidential use. (The remainder of this page is intentionally left blank.) 8 MN190\163\801191.v1 ARTICLE III Acquisition and Conveyance of Property; TIF Assistance Section 3.1. Conveyance of the Development Property. As of the date of this Agreement, the Authority owns Outlot A, Country Club Manor, Wright County, Minnesota, which includes the Development Property described in Schedule A and the Apartments Property described in Schedule G. At Closing, the Authority will record a new plat for such property in order to subdivide Outlot A, a portion which will be the Development Property, and will convey title to and possession of the Development Property to the Developer, subject to all the terms and conditions of this Agreement. Section 3.2. Purchase Price; Provisions for Payment; and Fees. (a) The purchase price to be paid to the Authority by the Developer in exchange for the conveyance of the Development Property is $789,303. The purchase price shall be paid in cash from the Developer in the amount of $1.00 and a purchase price note from the Developer in the amount of $789,302 (the "Purchase Price Note") in substantially the form attached hereto as Schedule C payable from Purchase Price Note Available Tax Increments in accordance with the terms of this paragraph. The Purchase Price Note shall accrue interest at the rate of 3.00% per annum. Commencing August 1, 2025, on each February 1 and August 1 thereafter to and including the termination date of the TIF District, or, if the first day of either February 1 or August I should not be a Business Day, the next succeeding Business Day (the "Purchase Price Note Payment Dates") the Authority will credit against the principal amount of the Developer's Purchase Price Note plus accrued interest thereon at the rate of 3.00% per annum, the Purchase Price Note Available Tax Increments. On the termination date of the TIF District, the Authority will forgive the outstanding balance of the Purchase Price Note subject to Section 4.3(d). (b) In addition, the Developer shall assume or pay all taxes, special assessments, including certain deferred special assessments in the amount of $188,295, and similar governmental impositions due and payable in the year of Closing and after the Closing Date and all future years. The Developer will pay: (a) the closing fees charged by the Title Company, if any, utilized to close the transaction contemplated by this Article III; (b) fees for title evidence obtained by Developer; (c) title insurance premium costs; (d) the recording fee for the deed transferring title to the Developer; (e) any survey or environmental investigation costs incurred by it; (f) any transfer taxes, recording fees and Well Disclosure fees required to enable the Developer to record the Deed from the Authority under this Agreement; and (g) fees and charges related to the filing of any instrument required to make title marketable or otherwise change the condition of the Development Property. Section 3.3 Representation and As Is Conveyance. (a) In recognition of the significant economic contributions which the Authority is making to develop the Minimum Improvements by providing the tax increment assistance, the Developer shall take the conveyance of Development Property on an "AS IS" "WHERE IS" basis, with all faults and defects, without any warranties, express or implied, except such representations and warranties as specifically set forth in this Agreement, and the Developer waives any claims against the Authority, the City and their governing bodies' members, officers, agents, including the 9 MN190\163\801191.v1 independent contractors, consultants and legal counsel and employees thereof (collectively the "Indemnified Parties"), for indemnification, contribution, reimbursement or other payments arising under federal and state law and the common law relating to environmental or any other condition of Development Property. (b) The Authority makes no representations concerning nor shall have any responsibility or obligation to undertake any cleanup or remediation on the Development Property. If the Developer does not terminate this Agreement pursuant to Section 3.5(a) hereof, following delivery of the Deed, the Developer agrees to remediate any environmental contamination or pollution on the Development Property that may be required by law. (c) The Authority has no obligation to produce any evidence of title. The Developer will obtain a commitment for an owner's title insurance policy issued by the Title Company naming Developer as the proposed owner -insured of the Development Property (the "Commitment") in accordance with Section 3.4 hereof and review copies of all documents referred to in the Commitment. (d) The Developer is hereby granted the right to enter upon and inspect, analyze and test the Development Property for all reasonable purposes, including conducting soil tests upon 24 hours' notice to the Authority. The Developer shall pay for the cost of all investigations of the Development Property which are ordered by Developer for purposes of conducting its own investigations of the Development Property. Developer hereby agrees to indemnify and hold the Authority harmless from any claims, damages, costs and liability, including without limitation reasonable attorneys' fees, resulting from entering upon the Development Property or the performing of the analysis, tests or inspections referred to in this section. The Developer's environmental consultant has recommended further Phase II environmental investigations with respect to material deposited on the site; the Authority hereby authorizes such investigations. (e) Without limiting its obligations under Section 8.3 hereof, the Developer agrees to indemnify, defend, and hold harmless the "Indemnified Parties, from any claims or actions to the extent arising out of any claim related to the presence of hazardous substances on the Development Property, or any portion thereof, which either (i) arise out of activities of the Developer on the Development Property or (ii) arise out of hazardous substances, asbestos, petroleum substances, or pollutants, irritants or contaminants brought onto the Development Property by the Developer. In addition, the Developer agrees to release the Indemnified Parties from any and all costs, expenses, losses, liabilities, claims, causes of action, demands, and damages relating to the environmental conditions on the Development Property as of the date of Closing, including without limitation any claim the Developer may have to recover from all or any of the Indemnified Parties any costs or expenses incurred by the Developer in performing any remediation of the Development Property. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes, Sections 466.04 and 604.02, as amended. Section 3.4 Title. Within 30 days after the date of this Agreement, the Developer shall obtain a commitment for the issuance of a policy of title insurance for the Development Property. The Developer shall have 20 days from the date of its receipt of such commitment and a current survey of the Development Property to review the state of title (including survey matters) to the 10 MN190\163\801191.v1 Development Property and to provide the Authority with a list of written objections to such title (including survey matters). Objections not made within such time will be deemed waived. The Developer shall have 60 days from the date of such objection to effect a cure; provided, however, that the Developer shall have no obligation to cure any objections, and may inform the Authority of such. In the event that the Developer has failed to obtain a cure of such objections within 60 days after the date hereof, the Developer may (i) by the giving of written notice to the Authority terminate this Agreement, upon the receipt of which this Agreement shall be null and void and neither party shall have any liability hereunder, or (ii) waive any title objections and proceed to Closing. The Authority shall have no obligation to take any action to clear defects in the title to the Development Property. The Authority shall take no actions to encumber title to the Development Property between the date of this Agreement and the deed is delivered to the Developer. The Authority expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to any portion of the Development Property prior to the applicable Closing. The Developer shall take no actions to encumber title to any portion of the Development Property between the date of this Agreement and the time the deed for that portion of the Development Property is delivered to the Developer. The Developer expressly agrees that it will not cause or permit the attachment of any mechanics, attorneys, or other liens to any portion of the Development Property prior to the applicable Closing. Notwithstanding termination of this Agreement prior to any Closing, the Developer is obligated to pay all costs to discharge any encumbrances to any portion of the Development Property attributable to actions of the Developer, its employees, officers, agents or consultants, including without limitation any architect, contractor and or engineer. Section 3.5 Contingencies to Closing on Development Property. (a) Developer's Contingencies. The Developer's obligation to close on the purchase of the Development Property is expressly conditioned upon each of the following contingencies being satisfied or waived: (i) obligations required to be performed by Authority under this Agreement as of the Closing Date, including but not limited to, delivery of all of the Authority's Documents described in Section 3.6(b) hereof, and (ii) the Developer shall have received all necessary rezoning, variances, conditional use permits and other permits, site plan and other approvals needed to permit the construction of the Minimum Improvements; and (iii) the Developer shall have completed such environmental investigation (including soil conditions) with respect to the Development Property as it deems prudent and in its sole discretion shall be satisfied with the results thereof, and (iv) the Developer shall have obtained financing acceptable to the Developer for development of the Minimum Improvements; and 11 MN190\163\801191.v1 (v) on the Closing Date, the Authority shall convey the certain property described in Schedule G (the "Apartments Property") to an Affiliate pursuant to the terms of a purchase and development agreement; and (vi) on the Closing Date, the Title Company shall be irrevocably committed to issue to Developer an owner's policy of title insurance with respect to the Development Property in form and substance approved by Developer. (b) Authority's Contingencies. The Authority's obligation to close on the sale of the Development Property is expressly conditioned upon each of the following contingencies being satisfied or waived: (i) Developer shall have performed all of the obligations required to be performed by Developer under this Agreement as of the Closing Date; and (ii) Developer shall have delivered to the Authority all of the Developer's Documents described in Section 3.6(3); and (iii) The Authority shall have approved the sale of the Development Property to the Developer upon satisfaction of all other conditions required by State law; and (iv) The Developer shall have submitted the Construction Plans to the Authority and the Authority shall have approved the Construction Plans pursuant to Section 4.2 hereof; and (v) The Developer shall have received a building permit for the construction of the Minimum Improvements; and (vi) Developer shall have received or the Authority shall have determined that the Developer will receive all necessary rezoning, variances, conditional use permits and other permits, site plan and other approvals needed to permit the construction of the Minimum Improvements including without limitation any needed variances and final Plat or subdivision approval; and (vii) Developer shall have provided evidence that it has financing for development of the Minimum Improvements satisfactory to the Authority in its sole discretion; and (viii) The Authority shall have obtained final Plat approval or obtain the necessary subdivision approvals required for the construction of the Minimum Improvements; and (ix) The Authority shall have determined that the Minimum Improvements to be undertaken by the Developer on the Development Property is in conformance with this Agreement and the development objectives set forth in the Authorizing Resolution; and (c) Authority's and Developer's Options. In the event that any of the foregoing contingencies fail to be satisfied on or before September 30, 2022, the Developer or the Authority, as the case may be, may: 12 MN190\163\801191.v1 (i) terminate this Agreement; or (ii) waive such failure and proceed to close; provided that the contingencies in Section 3.5(a) are solely for the benefit of the Developer and may be waived only by the Developer and the contingencies in Section 3.5(b) are solely for the benefit of the Authority and may be waived only by the Authority; or (iii) the Developer and Authority may mutually agree to extend the Closing Date. Section 3.6 Closing. (a) Time and Place. Subject to the terms and conditions of this Agreement, the Closing on the purchase and sale of the Development Property shall take place on or before the Closing Date and shall take place at such place which is mutually acceptable to the parties. The Authority shall deliver possession of the Development Property on the Closing Date. (b) Authority's Documents. At the Closing, the Authority shall execute, where appropriate, and deliver all of the following "Authority's Documents": (i) The updated plat for the Development Property, fully signed by all required parties and ready to be recorded. (ii) The Deed, in substantially the form as Schedule B attached hereto, properly executed on behalf of the Authority conveying the Development Property to the Developer, together with any other documents reasonably required to be delivered by the Authority. (iii) A transferor's certification stating that Authority is not a "foreign person", "foreign partnership", "foreign trust" or "foreign estate" as those terms are defined in Section 1445 of the Internal Revenue Code, and containing such additional information as may be required thereunder. (iv) A settlement statement consistent with this Agreement. (c) Developer's Documents. At the Closing, the Developer shall execute, where appropriate, and deliver all of the following "Developer's Documents": (i) A sworn construction cost statement executed by the Developer and the general contractor setting forth total Construction Costs of the Minimum Improvements. (ii) Proof of insurance required by this Agreement. (iii) To the extent required and obtainable as of the Closing Date, environmental clearances, subdivision approvals, permits, and any other required governmental approvals for the Minimum Improvements. (iv) An affidavit from Developer indicating on the Closing Date that there are no outstanding, unsatisfied judgments, tax liens or bankruptcies against or involving the 13 MN190\163\801191.v1 Developer; that there has been no skill, labor or material furnished to the Development Property for which payment has not been made or for which mechanic's liens could be filed. (v) Funds sufficient for payment by the Developer at Closing of the recording charges or fees for all documents which are to be placed on record, the fee or charge imposed by any closing agent designated by the Title Company, and any other incidental or related closing costs. (vi) The Construction Documents. (vii) Evidence satisfactory to the Authority that the Developer has sufficient financing to complete the Minimum Improvements. (viii) The Developer's estimate of the total development costs of the Minimum Improvements and sources of revenue to pay such costs and proforma cash flow for the Minimum Improvements. (ix) Such other documents as shall be required to carry out the intent of this Agreement. Section 3.7 Conveyance Subject to Right of Re-entry. The Authority's conveyance of the Development Property to the Developer pursuant to this Agreement will be made subject to a right of reentry for breach of a condition subsequent in favor of the Authority. The condition subsequent is that, barring any Unavoidable Delays, the Developer shall have completed or caused to be completed, not later than July 31, 2023, construction of the foundation of the Minimum Improvements on the Development Property in accordance with permits issued by the City. If Developer fails to satisfy such condition subsequent, the Authority shall provide written notice to the Developer and the Developer shall have 30 days from receipt of the Authority's notice to complete construction of the foundation of the Minimum Improvements. Failure to complete construction in such timeframe shall constitute a breach of the condition subsequent and the Developer shall re - convey the Development Property back to the Authority, without cost to the Authority. If the Developer fails to re -convey the Development Property to the Authority, the Authority may elect to exercise its right of reentry by commencing an action in Wright County District Court to establish the breach of the condition subsequent. If the Authority establishes a breach of the condition subsequent, title to and the right to possession of the Development Property and title to all improvements located thereon reverts to the Authority, without cost to the Authority, and the Developer is not entitled to any compensation from the Authority for the value of the Development Property or any improvements the Developer has made to the Development Property. The Developer must record the Certificate of Release set forth in the Deed in the proper County land records at its expense. Section 3.8. Advance of Purchase Price Note and Other Costs. At Closing, the Authority will forgo receipt of the full fair market value of the Development Property, by accepting the Purchase Price Note from the Developer as partial payment for the Development Property. The total original principal amount of the Purchase Price Note is $789,302. The terms of the Purchase Price Note are described in Section 3.2 hereof. The Authority is pledging Purchase Price Note Available Tax Increment to repayment of the Purchase Price Note. The Developer has no rights or interest in 14 MN190\163\801191.v1 any Tax Increment pledged to the repayment of the Purchase Price Note. The Authority retains the right to use any other Authority funds to prepay the principal of and interest on the Purchase Price Note on any date. Section 3.9. Reimbursement of Public Development Costs; Issuance of TIF Note. The Authority has determined that, in addition to providing the land write down described in Section 3.2, in order to make development of the Minimum Improvements financially feasible, it is necessary to reimburse Developer for a portion of its costs related to site preparation, public improvements, and construction of the affordable housing units of the Minimum Improvements on the Development Property (the "Public Development Costs") through the issuance of the TIF Note, subject to the terms of this Section. The total principal amount of Public Development Costs subject to reimbursement will not exceed $1,590,087. Public Development Costs in excess of the specified total are the responsibility of the Developer. (a) Conditions for Delivery of TIF Note. To reimburse a portion of the Public Development Costs incurred by Developer, the Authority shall issue and the Developer shall purchase the TIF Note in the maximum principal amount of $1,590,087. The Authority shall issue and deliver the TIF Note upon the occurrence of the following: (i) The Developer having delivered to the Authority evidence of Public Development Costs paid or incurred in at least the principal amount of the Note as well as one or more certificates signed by the Developer's duly authorized representative, containing the following: (A) a statement that each cost identified in the certificate is a Public Development Cost as defined in this Agreement and that no part of such cost has been included in any previous certification; (B) reasonable evidence that each identified Public Development Cost has been paid or incurred by or on behalf of the Developer; and (C) a statement that, to the Developer's knowledge, no uncured Event of Default by the Developer has occurred and is continuing under this Agreement; the Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require; (ii) Developer having delivered to the Authority an investment letter in a form reasonably satisfactory to the Authority. (iii) Developer having received from the Authority a certificate of occupancy for the Minimum Improvements. (b) Terms of TIF Note. The terms of the TIF Note will be substantially in the form shown in Schedule F in the form of the Resolution approving this Agreement and authorizing the TIF Note (the "Authorizing Resolution"), and the TIF Note will be subject to all terms of the Authorizing Resolution, which are incorporated herein by reference. (c) Termination of Right to TIF Note. Notwithstanding anything to the contrary in this Agreement, if the conditions for delivery of the TIF Note are not met by the date five (5) years after certification of the TIF District, the Authority's obligation to deliver the TIF Note shall terminate; provided that the remainder of this Agreement shall remain in full force and effect. 15 MN190\163\801191.v1 (d) Assignment of TIFNote. The Authority acknowledges that the Developer may assign the TIF Note to one or more lenders that provide part of the financing for the construction of the Minimum Improvements. The Authority consents to such an assignment, conditioned upon the satisfaction of the conditions set forth in the Note, the receipt of an investment letter from such third party in a form reasonably acceptable to the Authority and an assignment in a form approved by the Board of Commissioners of the Authority. (e) Qualifications. The Developer understands and acknowledges that the Authority makes no representations or warranties regarding the amount of TIF Note Available Tax Increment, or that revenues pledged to the TIF Note will be sufficient to pay the principal amount of and the interest on the TIF Note. Developer further acknowledges that estimates of Tax Increment prepared by the Authority or its municipal advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Developer may rely. If the Public Development Costs exceed the maximum aggregate principal amount of the TIF Note, such excess is the sole responsibility of Developer. The TIF Note shall be a special and limited obligation of the Authority and not a general obligation of the Authority or the City, and only TIF Note Available Tax Increments shall be used to pay the principal of the TIF Note. (f) Termination of Payments. The Authority's obligation to make payments on the TIF Note on any Payment Date or any date thereafter shall be conditioned upon the requirement that (i) there shall not at that time be an Event of Default that has occurred and is continuing under this Agreement that has not been cured during the applicable cure period, (ii) this Agreement shall not have been terminated pursuant to Section 9.2, and (iii) a certificate of occupancy has been issued for the Project. Section 3.10. No Business Subsidy. The parties agree and understand that the primary purpose of any financial assistance to the Developer under this Agreement is to facilitate development of housing and is therefore not a "business subsidy" within the meaning of Minnesota Statutes, Sections 116J.993 to 1161995 (the "Business Subsidy Act"). The Developer releases and waives any claim against the Authority and its governing body members, officers, agents, and employees thereof arising from application of the Business Subsidy Act to this Agreement, including without limitation any claim that the Authority failed to comply with the Business Subsidy Act with respect to this Agreement. Section 3.11. Payment of Administrative Costs. The Authority acknowledges that Developer has deposited with the Authority $10,000. The Authority will use such deposit to pay "Administrative Costs," which term means out of pocket costs incurred by the Authority together with staff costs of the Authority, all attributable to or incurred in connection with the negotiation and preparation of this Agreement, the TIF Plan, and other documents and agreements in connection with the development of the Development Property. At Developer's request, but no more often than monthly, the Authority will provide Developer with a written report including invoices, time sheets or other comparable evidence of expenditures for Administrative Costs and the outstanding balance of funds deposited. If at any time the Authority determines that the deposit is insufficient to pay Administrative Costs, the Developer is obligated to pay such shortfall within twenty (20) days after receipt of a written notice from the Authority containing evidence of the unpaid costs. If any balance of funds deposited remains upon issuance of the Certificate of Completion pursuant to Section 4.4 of this Agreement, the Authority shall promptly return such balance to Developer; provided that Developer remains obligated to pay subsequent Administrative 16 MN190\163\801191.v1 Costs related to any amendments to this Agreement requested by Developer. Upon termination of this Agreement in accordance with its terms, the Developer remains obligated under this section for Administrative Costs. 17 MN190\163\801191.v1 ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct the Minimum Improvements on the Development Property, in accordance with the approved Construction Plans, and will operate and maintain, preserve and keep the Minimum Improvements or cause the Minimum Improvements to be maintained, preserved and kept with the appurtenances and every part and parcel thereof, in good repair and condition. Section 4.2 Construction Plans. (a) Before commencement of construction of the Minimum Improvements, the Developer shall submit the Construction Plans to the Authority. The Construction Plans shall provide for the construction of the Minimum Improvements, as applicable, and shall be in conformity with this Agreement and all applicable State and local laws and regulations. The Authority will approve such Construction Plans in writing if. (i) such Construction Plans conform to the terms and conditions of this Agreement; (ii) such Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and regulations; (iii) such Construction Plans are adequate to provide for construction of the Minimum Improvements; and (iv) no Event of Default has occurred and remains uncured. No approval by the Authority shall relieve the Developer of the obligation to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances, rules and regulations, or to construct the Minimum Improvements in accordance therewith. No approval by the Authority shall constitute a waiver of an Event of Default or waiver of any State or City building or other code requirements that may apply. If approval of the Construction Plans is requested by the Developer in writing at the time of submission, such Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole or in part. Such rejections shall set forth in detail the reasons therefor, and shall be made within 30 days after the date of their receipt by the Authority. If the Authority rejects any Construction Plans in whole or in part, the Developer shall submit new or corrected Construction Plans within 30 days after written notification to the Developer of the rejection. The provisions of this Section relating to approval, rejection and resubmission of corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the Authority. The Authority's approval shall not be unreasonably withheld. Said approval shall constitute a conclusive determination that the Construction Plans (and the Minimum Improvements, constructed in accordance with said plans) comply to the Authority's satisfaction with the provisions of this Agreement relating thereto. (b) The Developer hereby waives any and all claims and causes of action whatsoever resulting from the review of the Construction Plans by the Authority and/or any changes in the Construction Plans requested by the Authority. Neither the Authority nor any employee or official of the Authority shall be responsible in any manner whatsoever for any defect in the Construction Plans or in any work done pursuant to the Construction Plans, including changes requested by the Authority. (c) If the Developer desires to make any material change in the Construction Plans after their approval by the Authority, the Developer shall submit the proposed change to the Authority for 18 MN190\163\801191.v1 its approval. If the Construction Plans, as modified by the proposed change, conform to the requirements of this Section with respect to such previously approved Construction Plans, the Authority shall approve the proposed change and notify the Developer in writing of its approval. Such change in the Construction Plans shall, in any event, be deemed approved by the Authority unless rejected, in whole or in part, by written notice by the Authority to the Developer, setting forth in detail the reasons therefor. Such rejection shall be made within 30 days after receipt of the notice of such change. The Authority's approval of any such change in the Construction Plans will not be unreasonably withheld. Nothing in this paragraph will relieve the Developer of the obligation to comply with any City ordinances or procedures regarding changes in Construction Plans, and any approvals by the Authority hereunder will not constitute approval by any Authority officials regarding any City requirement related to construction of the Minimum Improvements. (d) The approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority does not constitute a representation or warranty by the Authority that the Construction Plans or the Minimum Improvements comply with any applicable building code, health or safety regulation, zoning regulation, environmental law, labor law or regulation, or other law or regulation, or that the Minimum Improvements will meet the qualifications for issuance of a certificate of occupancy, or that the Minimum Improvements will meet the requirements of the Developer or any other users of the Minimum Improvements. Approval of the Construction Plans, or any proposed amendment to the Construction Plans, by the Authority will not constitute a waiver of an Event of Default. Nothing in this Agreement shall be construed to relieve the Developer of its obligations to receive any required approval of the Construction Plans from any City department. Section 4.3 Commencement and Completion of Construction. (a) Subject to Unavoidable Delays, the Developer must commence construction of the Minimum Improvements not later than April 30, 2023. The construction of the Minimum Improvements shall be deemed to be commenced when physical improvements have been made to the Development Property, including grading, excavation, or other physical site preparation work (in accordance with a permit issued by the City). (b) Subject to Unavoidable Delays, the Developer must substantially complete construction of all Minimum Improvements by December 31, 2024. The construction of the Minimum Improvements will be considered substantially complete on the date when (i) the Developer has received a temporary or permanent certificate of occupancy issued by the City for the Minimum Improvements, as applicable, and (ii) the Authority has determined the Minimum Improvements have been constructed substantially in accordance with the approved Construction Plans as provided in Section 4.2. Completion shall be evidenced by a Certificate of Completion as described in Section 4.4. (c) Developer agrees for itself, its successors and assigns, and every successor in interest to the Development Property, or any part thereof, that the Developer, and such successors and assigns, shall promptly begin and diligently prosecute to completion the development of the Development Property through the construction of the Minimum Improvements thereon, and that such construction shall in any event be commenced and completed within the period specified in this Section 4.3. Subsequent to conveyance of the Development Property, or any part thereof, to the Developer, and until construction of the Minimum Improvements has been completed, the Developer 19 MN190\163\801191.v1 shall make reports, in such detail and at such times as may reasonably be requested by the Authority, as to the actual progress of the Developer with respect to such construction. (d) If the Developer does not complete construction of the Minimum Improvements in accordance with the schedule set forth in Section 4.3 hereof, the Developer shall repay the principal amount of the Purchase Price Note in full. The Developer shall pay the Purchase Price Note within 30 days of written request from the Authority. Section 4.4 Certificate of Completion. At the request of the Developer, the Authority will issue a Certificate of Completion in accordance with this Section. The Developer may notify the Authority when construction of the Minimum Improvements has been substantially completed. The Authority shall, within 20 days after such notification, inspect the Minimum Improvements in order to determine whether the Minimum Improvements have been substantially completed and constructed in accordance with all local, state and federal laws and regulations (including without limitation environmental, labor, zoning, building code, housing code, and public health laws and regulations), and any applicable permits and in substantial conformity with this Agreement and the final Construction Plans approved by the Authority. Section 4.5. Records and Reports. (a) The Authority, through any authorized representatives, shall have the right at all reasonable times after reasonable written notice to inspect, examine and copy all books and records of Developer relating to the Minimum Improvements that are reasonably relevant to the Developer's obligations under this Agreement. Such records shall be kept and maintained by Developer through the Termination Date. (b) Upon request, the Developer also agrees to submit to the Authority written reports so as to allow the Authority to remain in compliance with reporting requirements under state statutes. Section 4.6. Income Limits. (a) The Authority and the Developer understand and agree that the TIF District will constitute a "housing district" under Section 469.174, subdivision 11 of the TIF Act. The Developer covenants that, for the duration of the TIF District, it will comply with all income requirements for a qualified residential rental project as defined in Section 142(d) of the Internal Revenue Code of 1986, as amended. Specifically, the Developer agrees to reserve at least 40% of the units of the Minimum Improvements for families with incomes at or below 60% of area median income in the County, adjusted for family size. (b) On or before February 2 of each year for the duration of the TIF District, the Developer shall submit evidence in substantially the form in Schedule E, showing that the Minimum Improvements meet the relevant income requirements. The parties agree and understand that the Developer may retain a manager (the "Manager") who will review such evidence and will certify to the Authority that the TIF District remains a housing district under the TIF Act. Developer is responsible for any costs incurred to compensate the Manager (or any successor) for such activities. (c) If the Authority receives notice from the Manager, if any, the State department of 20 MN190\163\801191.v1 revenue, the State auditor, any Tax Official or any court of competent jurisdiction that the TIF District does not qualify as a "housing district," such event shall be deemed an Event of Default under this Agreement and the Authority shall immediately stop payments of Available Tax Increment to pay principal of and interest on the TIF Note. In addition to any remedies available to the Authority under Article IX hereof, the Developer shall indemnify, defend, and hold harmless the Authority for any damages or costs resulting therefrom. (The remainder of this page is intentionally left blank.) 21 MN190\163\801191.v1 ARTICLE V IncnranrP Section 5.1. Insurance. (a) The Developer will provide and maintain at all times during the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance Policy and, from time to time during that period, at the request of the Authority, furnish the Authority with proof of payment of premiums on policies covering the following: (i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of completion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protected in accordance with a clause in form and content satisfactory to the Authority; (ii) Commercial general liability insurance (including operations, contingent liability, operations of subcontractors, completed operations, and contractual liability insurance) together with an Owner's Policy with limits against bodily injury and property damage of not less than $1,000,000 for each occurrence (to accomplish the above -required limits, an umbrella excess liability policy may be used). The Authority shall be listed as an additional insured on the policy; and (iii) Workers' compensation insurance, with statutory coverage, provided that the Developer may be self -insured with respect to all or any part of its liability for workers' compensation. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Developer shall maintain, or cause to be maintained, at its cost and expense, and from time to time at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies covering such risks as are ordinarily insured against by similar businesses. (ii) Commercial general public liability insurance, including personal injury liability (with employee exclusion deleted), against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $1,000,000, and shall be endorsed to show the City and Authority as additional insureds. (iii) Such other insurance, including workers' compensation insurance respecting all employees of the Developer, in such amount as is customarily carried by like organizations engaged in like activities of comparable size and liability exposure; provided that the 22 MN190\163\801191.v1 Developer may be self -insured with respect to all or any part of its liability for workers' compensation. (c) All insurance required in Article V of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Developer that are authorized under the laws of the State to assume the risks covered thereby. Upon request, the Developer will deposit annually with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided below the amounts required herein without giving written notice to the Developer and the Authority at least thirty (30) days before the cancellation or modification becomes effective. In lieu of separate policies, the Developer may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which event the Developer shall deposit with the Authority a certificate or certificates of the respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Developer agrees to notify the Authority immediately in the case of damage exceeding $250,000 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In such event the Developer will forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction, and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received by the Developer to the payment or reimbursement of the costs thereof. The Developer shall complete the repair, reconstruction, and restoration of the Minimum Improvements, regardless of whether the net proceeds of insurance received by the Developer for such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs, construction, and restoration shall be the property of the Developer. (e) In lieu of the Developer's obligation to reconstruct the Minimum Improvements as set forth in this Section, the Developer shall have the option of terminating the TIF Note and paying to the Authority an amount that, in the opinion of the Authority and its fiscal consultant, is sufficient to pay in full the outstanding principal and accrued interest on the Purchase Price Note. (f) The Developer and the Authority agree that all of the insurance provisions set forth in this Article V shall terminate upon the termination of this Agreement. Section 5.2. Subordination. Notwithstanding anything to the contrary contained in this Article V, the rights of the Authority with respect to the receipt and application of any proceeds of insurance shall, in all respects, be subject and subordinate to the rights of any lender under a Mortgage approved pursuant to Article VII of this Agreement. 23 MN190\163\801191.v1 ARTICLE VI Delinauent Taxes and Review of Taxes Section 6.1. Right to Collect Delinquent Taxes. The Developer agrees for itself, its successors, and assigns, that in addition to the obligation pursuant to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before delinquency all real estate taxes assessed against the Development Property and the Minimum Improvements. The Developer acknowledges that this obligation creates a contractual right on behalf of the Authority through the Termination Date to sue the Developer or its successors and assigns to collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the county auditor. In any such suit in which the Authority is the prevailing party, the Authority shall also be entitled to recover its costs, expenses, and reasonable attorney fees. Section 6.2. Review of Taxes. The Developer agrees that prior to the Termination Date, it will not cause a reduction in the real property taxes paid in respect of the Development Property through: (a) willful destruction of the Minimum Improvements or any part thereof; (b) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement, except as otherwise provided in Section 5.1(e); or (c) engaging in any other proceedings, whether legal, administrative or equitable, with any administrative body in the County or State or court of the State or federal government to reduce the amount of real estate or other taxes assessed against the Development Property or the Minimum Improvements. The Developer also agrees that it will not, prior to the Termination Date, apply for a deferral of property tax on the Development Property pursuant to any law, or transfer or permit transfer of the Development Property to any entity whose ownership or operation of the property would result in the Development Property being exempt from real estate taxes under State law. (The remainder of this page is intentionally left blank.) 24 MN190\163\801191.v1 ARTICLE VII Financing Section 7.1. Financing. (a) Before conveyance of the Development Property, the Developer shall submit to the Authority evidence of one or more commitments for mortgage financing which, together with committed equity for such construction, is sufficient for the construction of the Minimum Improvements. Such commitments may be submitted as short term financing, long term mortgage financing, a bridge loan with a long-term take-out financing commitment, or any combination of the foregoing. (b) If the Authority finds that the mortgage financing is sufficiently committed and adequate in amount to provide for the construction of the Minimum Improvements, then the Authority shall notify the Developer in writing of its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be given within thirty (30) days from the date when the Authority is provided the evidence of financing. A failure by the Authority to respond to such evidence of financing shall be deemed to constitute an approval hereunder. If the Authority rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for the rejection. In any event the Developer shall submit adequate evidence of financing within thirty (30) days after such rejection. Section 7.2. Authority's Option to Cure Default on Mortgagee. In the event that there occurs a default under any Mortgage authorized pursuant to Article VII of this Agreement, the Developer shall cause the Authority to receive copies of any notice of default received by the Developer from the holder of such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any such default on behalf of the Developer within such cure periods as are available to the Developer under the Mortgage documents. Section 7.3. Subordination and Modification for the Benefit of Mortgagee. In order to facilitate the Developer obtaining financing for purchase of the Development Property and for construction of the Minimum Improvements according to the Construction Plans, the Authority agrees to subordinate certain rights under this Agreement, provided that (a) such subordination shall be subject to such reasonable terms and conditions as the Authority and the holder of any mortgage mutually agree in writing after approval by the Board of Commissioners of the Authority, and (b) the Authority's obligation to subordinate is contingent on the Authority's approval of the financing in accordance with Section 7.1 hereof. 25 MN190\163\801191.v1 ARTICLE VIII Prohibitions Against Assignment and Transfer; Indemnification Section 8.1. Representation as to Development. The Developer represents and agrees that its purchase of the Development Property, and its other undertakings pursuant to the Agreement, are, and will be used, for the purpose of development of the Development Property and not for speculation in land holding. Section 8.2. Prohibition Against Developer's Transfer of Property and Assignment of Agreement. The Developer represents and agrees that until the Termination Date: (a) Except only by way of security for, and only for and the purpose of obtaining financing necessary to enable the Developer or any successor in interest to the Development Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under the Agreement, and any other purpose authorized by this Agreement, the Developer has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with respect to this Agreement or the Development Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, to any person or entity (collectively, a "Transfer"), without the prior written approval of the Authority's board of commissioners, which may not be unreasonably withheld, subject to Section 8.2(b). The term "Transfer" does not include (i) encumbrances made or granted by way of security for, and only for, the purpose of obtaining construction, interim or permanent financing necessary to enable the Developer or any successor in interest to the Development Property or to construct the Minimum Improvements or component thereof; (ii) any lease, license, easement or similar arrangement entered into in the ordinary course of business related to operation of the Minimum Improvements; or (iii) an assignment or other transfer to an Affiliate or that is otherwise permitted under Section 10.13 of this Agreement. (b) In the event the Developer, upon Transfer of the Development Property, seeks to be released from its obligations under this Agreement, the Authority shall be entitled to require, except as otherwise provided in this Agreement, as conditions to any such Transfer that: (i) Any proposed transferee shall have the qualifications and financial responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill the obligations undertaken in this Agreement and the Purchase Price Note by the Developer. (ii) Any proposed transferee, by instrument in writing satisfactory to the Authority and in form recordable among the land records, shall, for itself and its successors and assigns, and expressly for the benefit of the Authority, have expressly assumed all of the obligations of the Developer under this Agreement (including the Purchase Price Note) and agreed to be subject to all the conditions and restrictions to which the Developer is subject; provided, however, that the fact that any transferee of, or any other successor in interest whatsoever to, the Development Property, or any part thereof, shall not, for whatever reason, have assumed such obligations or so agreed, and shall not (unless and only to the extent otherwise 26 MN190\163\801191.v1 specifically provided in this Agreement or agreed to in writing by the Authority) deprive the Authority of any rights or remedies or controls with respect to the Development Property or any part thereof or the construction of the Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to the fullest extent permitted at law and in equity and excepting only in the manner and to the extent specifically provided otherwise in this Agreement) no transfer of, or change with respect to, ownership in the Development Property or any part thereof, or any interest therein, however consummated or occurring, and whether voluntary or involuntary, shall operate, legally or practically, to deprive or limit the Authority of or with respect to any rights or remedies on controls provided in or resulting from this Agreement with respect to the Minimum Improvements that the Authority would have had, had there been no such transfer or change. In the absence of specific written agreement by the Authority to the contrary, no such transfer or approval by the Authority thereof shall be deemed to relieve the Developer, or any other party bound in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements, from any of its obligations with respect thereto. (iii) Any and all instruments and other legal documents involved in effecting the transfer of any interest in this Agreement and the Purchase Price Note or the Development Property governed by this Article VIII, shall be in a form reasonably satisfactory to the Authority. (iv) The Developer and its transferees shall comply with such other conditions as the Authority may reasonably require in order to achieve and safeguard the purposes of the TIF Act and this Agreement. (v) The Developer agrees to pay all reasonable costs and expenses, including fees of legal counsel retained by the Authority, to review the documents submitted to the Authority in connection with any such transfer. In the event the foregoing conditions are satisfied then the Developer shall be released from its obligation under this Agreement. Section 8.3. Release and Indemnification Covenants. (a) The Developer releases from and covenants and agrees that the Indemnified Parties shall not be liable for and agrees to indemnify and hold harmless the Authority and the governing body members, officers, agents and employees thereof against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum Improvements or the Development Property. (b) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Developer agrees to protect and defend the Indemnified Parties, now or forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from 27 MN190\163\801191.v1 this Agreement, or the transactions contemplated hereby or the acquisition, construction, installation, ownership, and operation of the Minimum Improvements. (c) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations under this Agreement, the Indemnified Parties shall not be liable for any damage or injury to the persons or property of the Developer or its officers, agents or employees or any other person who may be about the Development Property or Minimum Improvements. (d) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Authority and not of any governing body member, officer, agent or employee of the Authority or the City in the individual capacity thereof. (The remainder of this page is intentionally left blank.) 28 MN190\163\801191.v1 ARTICLE IX Events of Default Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Agreement, and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or more of the following events, after the non -defaulting party provides sixty (60) days' written notice to the defaulting party of the event, but only if the event has not been cured within said sixty (60) days or, if the event is by its nature incurable within sixty (60) days, the defaulting party does not, within such sixty (60) day period, provide assurances reasonably satisfactory to the party providing notice of default that it is proceeding with due diligence to cure such default and the event will be cured as soon as reasonably possible: (a) any failure by either party to this Agreement to observe or perform any material covenant, condition, obligation or agreement on its part to be observed or performed under this Agreement or under any other agreement entered into between the Developer and the Authority in connection with development of the Development Property; (b) any default by Developer under a Mortgage, if any, that entitles the mortgagee to foreclose the Mortgage; and (c) failure by the Developer to timely pay any ad valorem real property taxes assessed with respect to the Development Property. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 of this Agreement occurs, the non -defaulting party may exercise its rights under this Section 9.2: (a) Suspend its performance under this Agreement until it receives assurances that the defaulting party will cure its default and continue its performance under this Agreement. (b) The Authority may cancel and rescind or terminate this Agreement and/or the TIF Note. (c) The Authority may suspend its performance under this Agreement and the TIF Note. Interest on the TIF Note shall not accrue during the period of any suspension of payment. (d) The Authority may demand that the Developer immediately repay the outstanding principal balance of and interest on the Purchase Price Note. (e) The Authority may take whatever action, including legal, equitable or administrative action, which may appear necessary or desirable to collect any payments due under this Agreement, or to enforce performance and observance of any obligation, agreement, or covenant under this Agreement. The Authority agrees that any mortgagee of the Development Property will have the right, but not the obligation, to cure any default by Developer and any such cure will be deemed to have 29 MN190\163\801191.v1 been made by Developer. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or Developer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it, it shall not be necessary to give notice, other than such notice as may be required in this Article IX. Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. (The remainder of this page is intentionally left blank.) 30 MN190\163\801191.v1 ARTICLE X Additional Provisions Section 10.1. Conflict of Interests; Authority Representatives Not Individually Liable. The Authority and the Developer, to the best of their respective knowledge, represent and agree that no member, official, or employee of the Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, or employee participate in any decision relating to this Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. No member, official, or employee of the Authority shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the Authority or County or for any amount which may become due to the Developer or successor or on any obligations under the terms of this Agreement. Section 10.2. Equal Employment Opportunity. The Developer, for itself and its successors and assigns, agrees that during the construction of the Minimum Improvements provided for in this Agreement it will comply with all applicable federal, state, and local equal employment and non- discrimination laws and regulations. Section 10.3. Restrictions on Use. The Developer agrees that until the Termination Date, the Developer, and its successors and assigns, shall use the Development Property for the operation of the Minimum Improvements for uses described in the definition of such term in this Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Development Property or any improvements erected or to be erected thereon, or any part thereof. Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement are intended to or shall be merged by reason of any deed transferring any interest in the Development Property and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement. Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 10.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally; and (a) in the case of the Developer, is addressed to or delivered personally to the Developer at 7730 Laredo Drive, Unit 446, Chanhassen, MN 55317 and (b) in the case of the Authority, is addressed to or delivered personally to the Authority at 505 Walnut Street, Suite 1, Monticello, Minnesota 55362, Attn: Executive Director; or at such 31 MN190\163\801191.v1 other address with respect to either such party as that parry may, from time to time, designate in writing and forward to the other as provided in this Section. Section 10.7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute one and the same instrument. Section 10.8. Recording. The Authority may record this Agreement and any amendments thereto with the Wright County recorder. The Developer shall pay all costs for recording. Section 10.9. Amendment. This Agreement may be amended only by written agreement approved by the Authority and the Developer. Section 10.10. AuthorityApprovals. Unless otherwise specified, any approval required by the Authority under this Agreement may be given by the Authority Representative as determined by the Authority in their sole discretion. Section 10.11. Termination. This Agreement terminates on the Termination Date. Upon termination of this Agreement, the Authority shall promptly execute any reasonable documents necessary to remove this Agreement from the title records of the Development Property. Notwithstanding the foregoing, the Developer's obligations under Sections 3.3(e), 8.3 and 3.11 shall survive termination. Section 10.12. Choice of Law and Venue. 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 10.13. Developer's Right to Assign this Agreement at or before Closing. The Authority agrees that Headwaters Development LLC may assign or otherwise transfer its rights under this Agreement, or its right to receive the conveyance of the Development Property at the Closing, to any Affiliate of Headwaters Development LLC, or any other entity in which the direct or indirect owners of Headwaters Development LLC own a material interest, without the Authority's consent provided that the Developer must provide a signed copy of an assignment and assumption agreement between the Developer and the new owner whereby the new owner agrees to comply with all provisions of this Agreement (the "Assignment"). If the Development Property is conveyed at the Closing to such an affiliate of Headwaters Development LLC, upon delivery of the Assignment to the Authority, Headwaters Development LLC will be released from all obligations and liabilities of the "Developer" under this Agreement, and the transferee of the Development Property will be solely liable for the obligations and liabilities of the Developer. 32 MN190\163\801191.v1 IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Developer has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. 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 Executive Director of the City of Monticello Economic Development Authority, a public body corporate and politic, on behalf of the Authority. Notary Public S-1 MN190\163\801191.v1 HEADWATERS DEVELOPMENT LLC, a Minnesota limited liability company LOW STATE OF MINNESOTA ) SS. COUNTY OF ) Its The foregoing instrument was acknowledged before me this day of , 2022 by , the of Headwaters Development LLC, a Minnesota limited liability company, on behalf of the company. Notary Public S-1 MN190\163\801191.v1 SCHEDULE A Development Property The real property in the City of Monticello, County of Wright, State of Minnesota, legal described as follows: Lots 1-21, Block 1, Country Club Manor First Addition Lots 1-11, Block 2, Country Club Manor First Addition Lots 1-11, Block 3, Country Club Manor First Addition Lots 1-21, Block 4, Country Club Manor First Addition Outlot A, Country Club Manor First Addition Outlot B, Country Club Manor First Addition Outlot C, Country Club Manor First Addition A-1 MN190\163\801191.v1 DEED TAX DUE: $ ECRV: (month/day/year) SCHEDULE B FORM OF QUIT CLAIM DEED op 3 inches reserved for recordi QUIT CLAIM DEED DATE: _ FOR VALUABLE CONSIDERATION, City of Monticello Economic Development Authority (insert name of Grantor) a public body corporate and politic under the laws of Minnesota ("Grantor"), hereby conveys and quitclaims to (insert name of Grantee) a Minnesota limited liability company under the laws of Minnesota, ("Grantee"), real property in Wright County, Minnesota, legally described as follows: Lots 1-21, Block 1, Country Club Manor First Addition Lots 1-11, Block 2, Country Club Manor First Addition Lots 1-11, Block 3, Country Club Manor First Addition Lots 1-21, Block 4, Country Club Manor First Addition Outlot A, Country Club Manor First Addition Outlot B, Country Club Manor First Addition Outlot C, Country Club Manor First Addition Check here if all or part of the described real property is Registered (Torrens) ❑ together with all hereditaments and appurtenances and subject to the Right of Re -Entry for Breach of Condition Subsequent in favor of Grantor which is described on Exhibit A. Check applicable box: ❑ The Seller certifies that the Seller does not know of any wells on the described property. ❑ A well disclosure certificate accompanies this document (If electronically filed, insert WDC number: ). ❑ I am familiar with the property described in this instrument and I certify that the status and number of wells on the described real property have not changed since the last previously IM City of Monticello Economic Development Authority By: Steve Johnson Its: President MN190\163\801191.vl filed well disclosure certificate. State of Minnesota, County of WRIGHT By: Jim Thares Its: Executive Director This instrument was acknowledged before me on , 20 by Steve Johnson, as President and by Jim Thares, as Executive Director of the City of Monticello Economic Development Authority (the "Authority"), a public body corporate and politic under the Constitution and laws of the State of Minnesota, on behalf of the Authority. THIS INSTRUMENT WAS DRAFTED BY (insert name and address) Kennedy & Graven, Chartered (GAF) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 Notary Public TAX STATEMENTS FOR THE REAL PROPERTY DESCRIBED IN THIS INSTRUMENT SHOULD BE SENT TO: (insert name and address of Grantee to whom tax statements should be sent) c/o Headwaters Development LLC 7730 Laredo Dr., Unit 446 Chanhassen, MN 55317 MN190\163\801191.vl EXHIBIT A TO QUIT CLAIM DEED EXECUTED BY THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, GRANTOR, IN FAVOR OF LLC, GRANTEE. The City of Monticello Economic Development Authority (the "Grantor") is conveying the property described in the attached Quit Claim Deed (the "Development Property") to LLC ("Grantee") subject to a right of re-entry for breach of conditions subsequent in favor of Grantor. The condition subsequent (such agreement, as the same may be modified or amended, the "Development Agreement") (capitalized terms utilized herein and not separately defined shall have the meanings ascribed to them in the Development Agreement) is that barring any Unavoidable Delays, the Developer shall have completed, by , 2022, construction of the foundation of the Minimum Improvements (as those terms are defined in the Development Agreement) on the Development Property in accordance with permits issued by the Grantor. If, solely as a result of the City's own willful misconduct, the City takes more than 30 days to review the Developer's complete request for a building permit, the date in the preceding sentence shall be extended by the number of days in excess of 30 that it takes the City to issue a building permit. If the Grantee breaches the condition subsequent, and does not cure such breach within the period and in the manner provided in the Development Agreement, the Grantee shall re -convey the Development Property to the Grantor. If the Grantee fails to re -convey the Development Property to the Grantor, the Grantor may elect to exercise its right of reentry by commencing an action in Wright County District Court to establish the breach of the condition subsequent. If the Grantor exercises its right of reentry and establishes a breach of the condition subsequent, title to and the right to possession of the Development Property and title to all improvements located thereon reverts to the Grantor, and the Grantee is not entitled to any compensation from the City or the Grantor for the value of the Development Property or any improvements the Grantee has made thereto except as specifically provided in the Development Agreement. The Grantee shall notify the Grantor when the Grantee has completed, or caused to be completed, construction of the foundation of the Minimum Improvements and the Commercial Minimum Improvements on the Development Property in accordance with permits issued by the Grantor. The Grantor shall, within 20 days after such notification, inspect the Development Property in order to determine whether the Grantee has completed construction of the foundation of the Minimum Improvements in accordance with permits issued by the Grantor. If the Grantor determines the Grantee has completed construction of the foundation of the Minimum Improvements in accordance with permits issued by the Grantor, the Grantor will furnish to the Grantee a Certificate of Release in the form attached hereto as Exhibit B, releasing the Development Property from the right -of -reentry The Certificate of Release issued for the Development Property shall conclusively satisfy and terminate the right of reentry of the Grantor with respect to the Development Property in this Quit Claim Deed or the Development Agreement. The Grantee must record the Certificate of B-3 MN190\163\801191.v1 Release in the proper County land records. B-4 MN190\163\801191.v1 EXHIBIT B TO QUIT CLAIM DEED EXECUTED BY THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY, GRANTOR, IN FAVOR OF LLC, GRANTEE. CERTIFICATE OF RELEASE Recitals. Recital One. LLC, a Minnesota limited liability company (the "Grantee") is the owner of the real property legally described in Exhibit A hereto (the "Development Property"). Recital Two. Grantee acquired title to the Development Property subject to a right of reentry for breach of conditions subsequent in favor of the Grantor (the "Right of Reentry") set forth in a deed from the City of Monticello Economic Development Authority (the "Grantor") dated , 2022 and recorded in the office of the Wright County Registrar of Titles /Wright County Recorder on as Document No. (the "Deed"). Recital Three. The Grantee is a party to a Development Agreement between the Grantor and the Grantee, dated , 2022 (such agreement, as the same may be modified or amended, the "Development Agreement") (capitalized terms utilized herein and not separately defined shall have the meanings ascribed to them in the Development Agreement). Recital Four. Pursuant to the Development Agreement the Grantee is obligated to have completed, or caused to be completed, by , 20_, construction of the foundation of the Minimum Improvements in accordance with permits issued by the Grantor. Recital Five. The Grantor's Right of Reentry would be triggered by the Grantee's failure to have completed, or caused to be completed, by , 20_, construction of the foundation of the Minimum Improvements in accordance with permits issued by the City of Monticello, Minnesota. Recital Six. The Grantee has represented to the Grantor that the Grantee has completed, by , 20_, construction of the foundation of the Minimum Improvements in accordance with permits issued by the Grantor and has requested this Certificate of Release from the Grantor. Certificate of Release. The Grantor hereby certifies that the Grantee has satisfied its obligations with respect to completing, or causing to be completed, by , 20 , construction of the foundation of the Minimum Improvements in accordance with permits issued by the Grantor. The Grantor further acknowledges and agrees that the Development Property is released from the Right of Reentry. Modification of Development Agreement. Section 3.7 of the Development Agreement is hereby deleted in its entirety. B-5 MN190\163\801191.v1 IN WITNESS WHEREOF, the Grantor has caused this certificate to be duly executed on its behalf this day of , 20 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY By: Its: President Bv: Its: Executive Director STATE OF MINNESOTA COUNTY OF WRIGHT This instrument was acknowledged before me on 20 by , as President and by , as Executive Director of the City of Monticello Economic Development Authority, a public body corporate and politic under the Constitution and laws of the State of Minnesota, on behalf of the Authority. Notary Public DRAFTED BY: Kennedy & Graven, Chartered (GAF) 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 B-6 MN190\163\801191.v1 EXHIBIT A TO CERTIFICATE OF RELEASE LEGAL DESCRIPTION OF DEVELOPMENT PROPERTY The real property in the City of Monticello, County of Wright, State of Minnesota, legal described as follows: Lots 1-21, Block 1, Country Club Manor First Addition Lots 1-11, Block 2, Country Club Manor First Addition Lots 1-11, Block 3, Country Club Manor First Addition Lots 1-21, Block 4, Country Club Manor First Addition Outlot A, Country Club Manor First Addition Outlot B, Country Club Manor First Addition Outlot C, Country Club Manor First Addition B-7 MN190\163\801191.v1 SCHEDULE C PURCHASE PRICE NOTE Dated 92022 (the "Developer"), hereby acknowledges itself to be indebted and, for value received, hereby promises to pay, solely from Purchase Price Note Pledged Tax Increment as provided herein, to the City of Monticello Economic Development Authority (the "EDA") the principal sum of Seven Hundred Eighty Nine Thousand Three Hundred Two Dollars and 00/100 ($789,302). The principal amount of this Purchase Price Note (the "Note") shall equal, from time to time, the principal amount stated above, as reduced to the extent that such principal shall have been paid in whole or in part pursuant to the terms hereof. This Note is issued pursuant to that certain Purchase and Development Contract, dated as of , 2022, as the same may be amended from time to time (the "Assistance Agreement"), by and between the EDA and the Developer. This Note bears interest until paid at a rate equal to 3.00% per annum (computed on the basis of a 360-day year, of twelve 30-day months). The Developer acknowledges that the EDA will credit Purchase Price Note Pledged Tax Increment (as defined in the Assistance Agreement) to the payment of this Note pursuant to the Purchase Price Loan (as defined in the Assistance Agreement). If, as of the termination date of the TIF District (as defined in the Assistance Agreement), the EDA has received Purchase Price Note Pledged Tax Increments available for the payment of this Note in an amount less than $789,302 plus accrued interest thereon, the EDA will forgive the remaining principal amount of this Note plus accrued interest thereon. This Note is prepayable at any time without penalty and the EDA may use apply other EDA funds to the prepayment of this Note. IN WITNESS WHEREOF, executed and delivered as of the date first written above. By: Its: LLC, has caused this Note to be LLC MN190\163\801191.v1 C-1 SCHEDULE D FORM OF CERTIFICATE OF COMPLETION CERTIFICATE OF COMPLETION WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and LLC ("Developer") entered into a certain Purchase and Development Contract dated , 2022 (the "Contract"), recorded at the office of the County Recorder of Wright County as Document No. ; and WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles III and IV thereof related to constructing certain Minimum Improvements; and WHEREAS, the Developer has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all construction and other physical improvements related to the Minimum Improvements specified to be done and made by the Developer have been completed and the agreements and covenants in Articles III and IV of the Contract relating to such construction have been performed by the Developer, and this Certificate is a conclusive determination of the satisfactory termination of the covenants and conditions of Articles III and IV of the Contract related to completion of the Minimum Improvements, but any other covenants in the Contract shall remain in full force and effect. MN190\163\801191.v1 D-1 Dated: STATE OF MINNESOTA COUNTY OF WRIGHT 20. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY SS. Authority Representative The foregoing instrument was acknowledged before me this day of 20_, by , the 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 This document was drafted by: KENNEDY & GRAVEN, Chartered (GAF) 150 South 5th Street, Suite 700 Minneapolis, MN 55402 Telephone: (612) 337-9300 (Signature page to Certificate of Completion) MN190\163\801191.v1 D-2 SCHEDULE E Form of Renter's Income Verification Form PROPERTY INFORMATION Postal Address of Property Unit Number TENANT INFORMATION Name of Tenant Phone # Number of family/household members: Annual Household Income* $ *Annual Household Income must be supported by documentation (i.e. copy of most current 1040's, etc). Failure to provide verification will constitute a "non -qualifying tenant". INCOME LIMIT INFORMATION 20 Income Limits Family Size Income 1 2 3 4 5 6 7 8 Does the Tenant meet these limits and has appropriate documentation been submitted? YES NO Pursuant to the Purchase and Development Contract between the City of Monticello Economic Development Authority and Headwaters Development LLC dated as of June 8, 2022, at least 24 of the 60 rental units comprising the Minimum Improvements must be reserved for tenants whose income is 60% or less of the area's median gross income. Signature of Tenant(s) Reviewed and approved on behalf of Headwaters Development LLC. Date Date Date MN190\163\801191.vl E-1 SCHEDULE F AUTHORIZING RESOLUTION CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. RESOLUTION AWARDING THE SALE OF, AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE ISSUANCE OF A TAX INCREMENT REVENUE NOTE TO LLC AND APPROVING A PURCHASE AND DEVELOPMENT AGREEMENT WITH LLC INCLUDING THE CONVEYANCE OF LAND BE IT RESOLVED BY the Board of Commissioners ("Board") of the City of Monticello Economic Development Authority, Monticello, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. Authorization. The Authority and the City of Monticello have approved the establishment of its Tax Increment Financing (Housing) District No. 1-43 (Headwaters Villas Project) (the "TIF District"), within the Central Monticello Redevelopment Project No. 1 ("Redevelopment Project") and have adopted a tax increment financing plan therefore for the purpose of financing certain public improvements within the Redevelopment Project. 1.02. To facilitate development of certain property in the TIF District, the Authority proposes to enter into a Purchase and Development Contract (the "Agreement") with LLC, a Minnesota limited liability company, or an affiliate thereof or entity related thereto (the "Developer"), under which among other things the Authority will convey to the Developer, certain property described as Lot 1, Block 5, Country Club Manor First Addition, Wright County, Minnesota (the "Development Property") at a cost below market value. 1.03. The Authority proposes to sell the Development Property to the Developer at the price of $789,303 which will be paid from cash in the amount of $1.00 and a Purchase Price Note (the "Purchase Price Note") from the Developer in the amount of $789,302 which will be repaid from tax increment. In addition, the Authority proposes to reimburse the Developer for certain public development costs in the amount not to exceed $1,590,087 through the issuance of a pay as you go tax increment financing note (the "TIF Note") subject to the terms and conditions set forth in the Agreement. 1.04. On the date hereof, the Authority conducted a duly noticed public hearing regarding the conveyance of the Development Property to the Developer pursuant to the Agreement, at which F-1 MN190\163\801191.v1 all interested parties were given an opportunity to be heard, and hereby finds that the execution of the Agreement and performance of the Authority's obligations thereunder, including the conveyance of the Development Property to the Developer, are in the best interest of the City and its residents. Section 2. Agreement and Land Sale Approved. 2.01 The Board approves the Agreement as presented to the Board, including the provisions for the conveyance of the Development Property therein, 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 documents 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 Agreement as a whole, including without limitation execution of any deed or other documents necessary to convey the Development Property to Developer. Section 3. TIF Note Authorized and Approved. 3.01. The Authority hereby approves issuance of the TIF Note pursuant to the Agreement. The TIF Note shall be issued in the maximum aggregate principal amount of $1,590,087 to the Developer in consideration of certain eligible costs incurred by the Developer under the Agreement, shall be dated the date of delivery thereof, and shall bear interest at a rate to be set at the lesser of the Developer's actual mortgage financing rate or 4.50%. The TIF Note will be issued in a single series designated Taxable Tax Increment Revenue Note (Headwaters Villas Project) issued in the principal amount of $1,590,087 to reimburse the Developer for certain costs in accordance with Section 3.9 of the Agreement. The TIF Note is secured by TIF Note Available Tax Increment, as further described in the form of the TIF Note attached hereto as Exhibit A. The Authority hereby delegates to the Executive Director the determination of the date on which the TIF Note is to be delivered, in accordance with the Agreement. Section 4. Form of TIF Note; Terms and Delivery of Note. 4.01 The TIF Note shall be in substantially the form attached hereto as Exhibit A, with the blanks to be properly filled in and the principal and interest rate amounts adjusted as of the date of issue. 4.02. Denomination, Pam. The TIF Note shall be issued as a single typewritten note numbered R-1. The TIF Note shall be issuable only in fully registered form. Principal of and interest on the TIF Note shall be payable by check or draft issued by the Registrar described herein. 4.03. Dates; Interest Payment Dates. Principal of and interest on the TIF Note shall be payable by mail to the owner of record thereof as of the close of business on the fifteenth day of the month preceding the Payment Date, whether or not such day is a business day. F-2 MN190\163\801191.v1 4.04. Registration. The Authority hereby appoints the City Finance Director to perform the functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows: (a) Register. The Registrar shall keep at its office a bond register in which the Registrar shall provide for the registration of ownership of the TIF Note and the registration of transfers and exchanges of the TIF Note. (b) Transfer of TIF Note. Upon surrender for transfer of the TIF Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form reasonably satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, and consent to such transfer by the Authority if required pursuant to the Agreement, the Registrar shall authenticate and deliver, in the name of the designated transferee or transferees, a new TIF Note of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may close the books for registration of any transfer after the fifteenth day of the month preceding each Payment Date and until such Payment Date. (c) Cancellation. The TIF Note surrendered upon any transfer shall be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (d) Improper or Unauthorized Transfer. When the TIF Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the same until it is reasonably satisfied that the endorsement on such TIF Note or separate instrument of transfer is legally authorized. The Registrar shall incur no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (e) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name the TIF Note is at any time registered in the bond register as the absolute owner of the TIF Note, whether the TIF Note shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such TIF Note and for all other purposes, and all such payments so made to any such registered owner or upon the owner's order shall be valid and effectual to satisfy and discharge the liability of the Authority upon such TIF Note to the extent of the sum or sums so paid. (f) Taxes, Fees and Charges. For every transfer or exchange of the TIF Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee, or other governmental charge required to be paid with respect to such transfer or exchange. (g) Mutilated, Lost, Stolen or Destroyed TIF Note. In case any TIF Note shall become mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new TIF Note of like amount, Termination Dates and tenor in exchange and substitution for and upon cancellation of such mutilated TIF Note or in lieu of and in substitution for such TIF Note lost, stolen, or destroyed, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; F-3 MN190\163\801191.v1 and, in the case the TIF Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that such TIF Note was lost, stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the Authority and the Registrar shall be named as obligees. The TIF Note so surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the mutilated, lost, stolen, or destroyed TIF Note has already matured or been called for redemption in accordance with its terms, it shall not be necessary to issue a new TIF Note prior to payment. 4.05. Preparation and Delivery. The TIF Note shall be prepared under the direction of the Executive Director and shall be executed on behalf of the Authority by the signatures of its President and Executive Director. In case any officer whose signature shall appear on the TIF Note shall cease to be such officer before the delivery of the TIF Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. When the TIF Note has been so executed, it shall be delivered by the Executive Director to the owner thereof in accordance with the Agreement. Section 5. Security Provisions. 5.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest on the TIF Note all TIF Note Available Tax Increment as defined in the TIF Note. TIF Note Available Tax Increment shall be applied to payment of the principal of and interest on the TIF Note in accordance with the terms of the form of TIF Note set forth in Section 2 of this resolution. Section 6. Certification of Proceedings. 6.01. Certification of Proceedings. The officers of the Authority are hereby authorized and directed to prepare and furnish to the owner of the TIF Note certified copies of all proceedings and records of the Authority, and such other affidavits, certificates, and information as may be required to show the facts relating to the legality and marketability of the TIF Note as the same appear from the books and records under their custody and control or as otherwise known to them, and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed representations of the Authority as to the facts recited therein. Section 7. Effective Date. This resolution shall be effective upon approval. Approved by the Board of Commissioners of the City of Monticello Economic Development Authority on June 8, 2022. President ATTEST: Executive Director F-4 MN190\163\801191.v1 EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY No. R-1 $ TAXABLE TAX INCREMENT REVENUE NOTE SERIES 20_ (HEADWATERS VILLAS PROJECT) Date Rate of Original Issue [lesser of 4.50% or Developer's actual financing rate] , 20 The City of Monticello Economic Development Authority (the "Authority") for value received, certifies that it is indebted and hereby promises to pay to LLC, a Minnesota limited liability company, or registered assigns (the "Owner"), the principal sum of $ and to pay interest thereon at the rate of percent ( %) per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall have the meanings provided in the Purchase and Development Contract between the Authority and the Owner, dated as of June 8, 2022 (the "Agreement"), unless the context requires otherwise. 1. Payments. Principal and interest (the "Payments") shall be paid on August 1, 2025 and each February I and August I thereafter ("Payment Dates") to and including February 1, 2041 (the "Maturity Date") in the amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to accrued interest, and then to unpaid principal. TIF Note Available Tax Increment will not include any Tax Increment (as defined the Agreement) if, as of any Payment Date, there is an uncured Event of Default under the Agreement. Payments are payable by mail to the address of the Owner or such other address as the Owner may designate upon sixty (60) days written notice to the Authority. Payments on this TIF Note are payable in any coin or currency of the United States of America which, on the Payment Date, is legal tender for the payment of public and private debts. 2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal, commencing on the date of original issue. The Note shall bear simple non -compounding interest. 3. TIF Note Available Tax Increment. (a) Payments on this TIF Note are payable on each Payment Date solely from and in the amount of TIF Note Available Tax Increment, which shall mean, on each Payment Date, seventy-nine and four -tenths percent (79.4%) of the Tax F-5 MN190\163\801191.v1 Increment attributable to the Minimum Improvements and Development Property that is actually paid to the Authority by Wright County in the six (6) months preceding the Payment Date. (b) The Authority shall have no obligation to pay principal of and interest on this TIF Note on each Payment Date from any source other than TIF Note Available Tax Increment and the failure of the Authority to pay the entire amount of principal or interest on this TIF Note on any Payment Date shall not constitute a default hereunder as long as the Authority pays principal and interest hereon to the extent of TIF Note Available Tax Increment. The Authority shall have no obligation to pay any unpaid balance of principal or accrued interest that may remain after the final Payment on the Maturity Date. 4. Default. The Authority's payment obligations shall be subject to Sections 9.1 and 9.2 of the Agreement and are further subject to the conditions that (i) no Event of Default under Section 9.1 of the Agreement shall have occurred and be continuing at the time payment is otherwise due hereunder; and (ii) the Agreement and this TIF Note shall not have been terminated in accordance with Section 9.2 of the Agreement. Any such suspended and unpaid amounts shall become payable, without interest accruing thereon in the meantime, if this TIF Note has not been terminated in accordance with Section 9.2 of the Agreement and said Event of Default shall thereafter have been cured in accordance with Section 9.2. If pursuant to the occurrence of an Event of Default under the Agreement the Authority elects, in accordance with the Agreement, to cancel and rescind the Agreement and/or this TIF Note, the Authority shall have no further obligation under this TIF Note whatsoever. Reference is hereby made to all of the provisions of the Agreement, for a fuller statement of the rights and obligations of the Authority to pay the principal of this TIF Note and the interest thereon, and said provisions are hereby incorporated into this TIF Note as though set out in full herein. 5. Prepayment. The principal sum and all accrued interest payable under this TIF 6. Nature of Obligation. This TIF Note is one of an issue in the total principal amount of $ , issued to aid in financing certain public development costs and administrative costs of a Redevelopment Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.090 through 469.1081, as amended, and Section 469.001 through 469.047, as amended, and is issued pursuant to an authorizing resolution (the "Resolution") duly adopted by the Authority on , 2022, and pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174 to 469.1794, as amended. This TIF Note is a limited obligation of the Authority which is payable solely from TIF Note Available Tax Increment pledged to the payment hereof under the Resolution. This TIF Note and the interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without limitation, the Authority or the City of Monticello, Minnesota (the "City"). Neither the State of Minnesota, the City, the Authority nor any political subdivision thereof shall be obligated to pay the principal of or interest on this TIF Note or other costs incident hereto except out of TIF Note Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota , the City, the Authority, or any political subdivision thereof is pledged to the payment of the principal of or interest on this TIF Note or other costs incident hereto. F-6 MN190\163\801191.v1 THE AUTHORITY MAKES NO REPRESENTATION OR WARRANTY THAT THE TIF NOTE AVAILABLE TAX INCREMENT WILL BE SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE. 7. Registration and Transfer. This TIF Note is issuable only as a fully registered TIF Note without coupons. As provided in the Resolution, and subject to certain limitations set forth therein, this TIF Note is transferable upon the books of the Authority kept for that purpose at the principal office of the Executive Director, by the Owner hereof in person or by such Owner's attorney duly authorized in writing, upon surrender of this TIF Note together with a written instrument of transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to such transfer or exchange, there will be issued in the name of the transferee a new TIF Note of the same aggregate principal amount, bearing interest at the same rate and maturing on the same dates, within 15 days after the delivery by the Owner of its request and approval of such request by the Authority if required under the Agreement. Except as otherwise provided in the Agreement, this TIF Note shall not be transferred to any person or entity, unless the Authority has provided written consent to such transfer and the Authority is provided with an investment letter in a form satisfactory to the Authority. The Registrar may close the books for registration of any transfer after the fifteenth (15t') day of the month preceding each Payment Date and until such Payment Date. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be performed in order to make this TIF Note a valid and binding limited obligation of the Authority according to its terms, have been done, do exist, have happened, and have been performed in due form, time and manner as so required. IN WITNESS WHEREOF, the Board of Commissioners of the City of Monticello Economic Development Authority have caused this TIF Note to be executed with the manual signatures of its President and Executive Director, all as of the Date of Original Issue specified above. Executive Director F-7 MN190\163\801191.v1 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY President REGISTRATION PROVISIONS The ownership of the unpaid balance of the within TIF Note is registered in the bond register of the City Finance Director, in the name of the person last listed below. Date of Registration Registered Owner , 20 Federal Tax I.D No Signature of Executive Director MN190\163\801191.v1 SCHEDULE G Apartments Property The real property in the City of Monticello, County of Wright, State of Minnesota, legal described as follows: Lot 1, Block 5, Country Club Manor First Addition G-1 MN190\163\801191.v1 Illustration of Project on Site w _ I IT a E a S ti •L _I� 7 T IN _ T 1 ■ 4 9rp, I 4 A • I i I Wil Poo It I r I I I& m H A 00 L LA- - l4ira 1-.0 UHM _ ■ - 14iiJ• ■ ■ i IJFR■ CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY TAX INCREMENT FINANCING (TIF) PRE -APPLICATION BUSINESS SUBSIDY APPLICATION BUSINESS ASSISTANCE FINANCING CHC Monticello Townhomes LLC Legal name of applicant: Address: 161 St Anthony Avenue, Suite 825, St Paul, MN 55103 651-605-5222 Telephone number: Name of contact person: Wesley Butler REQUESTED INFORMATION Addendum shall be attached hereto addressing in detail the following: 1. A map showing the exact boundaries of proposed development. 2. Give a general description of the project including size and location of building(s); business type or use; traffic information including parking, projected vehicle counts and traffic flow; timing of the project; estimated market value following completion. 3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property. Include a statement as to how the proposed development will conform to the land use designation and how the property will be zoned. 4. A statement identifying how the increment assistance will be used and why it is necessary to undertake the project. 5. A statement identifying the public benefits of the proposal including estimated increase in property valuation, new jobs to be created, hourly wages and other community assets. 6. A written description of the developer's business, principals, history and past projects I understand that the application fee will be used for EDA staff and consultant costs and may be partially refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If the initial application fee is insufficient, I will be responsible for additional deposits. SIGNATURE Applicant's signature: —.- Date: November 1, 2022 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY Application for Tax Increment Financing (TIF) Assistance GENERAL INFORMATION: Business Name: CHC Monticello Townhomes LLC November 1, 2022 Date: Address: 161 St Anthony Avenue, Suite 825, St Paul, MN 55103 L Type (Partnership, etc.): Limited Liability Company Authorized Representative: Wesley Butler Phone: 651-605-5222 Description of Business: Real Estate Development Legal Counsel: Winthrop & Weinstine 225 South Sixth Street, Suite 3500 612-604-6755 Address: Minneapolis, MN 55402 Phone: FINANCIAL BACKGROUND: 1. Have you ever filed for bankruptcy? No 2. Have you ever defaulted on any loan commitment? No 3. Have you applied for conventional financing for the project? No 4. List financial references: Bremer Bank, Andrew Rickers (320-762-4705) — Alexandria, MN a. b. 2 5. Have you ever used. Business Assistance Financing before? If yes, what, where and when? PROJECT INFORMATION• 7'' Street West and Golf Course Road 1. Location of Proposed Project: to 2. Amount of Business Assistance requested? Land contribution for $1, $3,099,654 TIF 3. Need for Business Assistance: To provide affordable housing to seniors 55+ 4. Present ownership of site: City of Monticello 5. Number of permanent jobs created as a result of project? Approximately 3 FTEs 6. Estimated annual sales: Present: $0 Future: $1.875 million 7. Market value of project following completion: We estimate the value to be around $21.2 million for for the senior villa project 8. Anticipated start date: November 2022 FINANCIAL INFORMATION- 1. Estimated project related costs: a. Land acquisition b. Site development c. Building cost d. Equipment e. Architectural/engineering fee f. Legal fees g. Off -site development costs Completion Date: August 2023 $ 1.00 **Incl. in Building Cost $17,900,000.00 $20,000.00 $157,000.00 $75,000.00 $3,048,000.00 3 2. Source of financing: a. Private financing institution $ 14,587,222.00 b. Tax increment funds c. Other public funds 1,280,000.00 (net amount) 0.00 d. Developer equity 5,307,778.00 PLEASE INCLUDE: 1. Preliminary financial commitment from bank. 2. Plans and drawing of project. 3. Background material of company. 4. Pro Forma analysis. 5. Financial statements. 6. Statement of property ownership or control. 7. Payment of application fee of $10,000 COMMUNITY HOUSING CORPORATION "Creating and maintaining quality, affordable housing for better communities" Founded in 1990, The Community Housing Corporation of America (CHC) was created as a 501(c)3 non- profit company to address the affordable housing needs of the communities it serves. Over the decades it has provided affordable housing opportunities to the people of Minnesota, Florida and Texas. Since inception, CHC has been that of a quiet participant in the affordable housing space. For most of its existence, CHC operated solely by its Board of Directors through the engagement of vendors. This permitted the organization to invest in affordable housing, while maintaining low administrative costs. In 2021, CHC sold its out of state properties in a strategic maneuver to focus solely on the housing needs of Minnesota. This maneuver provided substantial resources for the organization to fulfill its mission. Additionally, the Board decided that part of this strategic change would be to create an organization with a paid staff compliment. The Board decided to hire its first ever Executive Director who would be charged with expanding the CHC portfolio of affordable housing in Minnesota and create a dynamic and focused organization, staffed with professionals in the field of affordable housing. This change occurred in 2022, when CHC hired Mr. Wesley Butler as its first Executive Director. Mr. Butler has many years of experience in the field of affordable housing and its development. The following is a listing of his experience: 2022 to Present Executive Director of Community Housing Corporation of America 2019 to 2022 Owner Butler Development Company LLC, Consulting 2015 to 2019 Assistant Commissioner of Minnesota Housing -Multifamily Division 2000 to 2015 Manager of Multifamily Finance, City of Minneapolis, Minnesota Mr. Butler is passionate about providing affordable housing, while maintaining sensitivity to the needs of the community where the housing will be located. With Mr. Butler's leadership, CHC is positioned to provide high quality, affordable housing in communities throughout Minnesota. CHC Currently owns affordable housing projects in Burnsville, Savage, Minnetonka, and Golden Valley. The financials of CHC demonstrate the financial capacity to successfully develop, own and operate this project. Please visit the CHC website for more information: www.communitvhousingcorporation.org Community Housing Corporation of America, Inc. Statement of Financial Position As of September 30, 2022 Current Assets Bank Accounts 110-10101 Checking (6749) 110-10105 Business Checking (3694) 110-10107 Savings (7837) TotalBankAccounts Other Current Assets 120-15000 DEVELOPER FEE RECEIVABLE 130-14300 PREPAID P&L INSURANCE 140-11860 INTERFUND 140-20000 Investment Accounts Total Other CurrentAssets Iotal Current -Assets Fixed Assets 150-15500 Fixed Assets TOWJFIeed.Assets - - TOTAL 252,645.19 505,160.52 480,838.62 $1,2 k"4_33 309,487.75 35,312.52 2,463,333.45 43,369,225.70 $46.177f359.42 $47,416,003.75 504.33 M04.33 Other Assets 180-17050 Seller Note Total Other -Assets 1,268,181.49 $1,268,161.49 I®IALASSETS _ - — _ _. $46.6$4.61�9 57 LIABILITIES AND EQUITY Liabilities Current Liabilities Accounts Payable 210-21000 ACCOUNTS PAYABLE ------- - -- -- ---- - TotalAceaunts Payable 3,569.13 $3,569.13 Credit Cards 220-21000 AMERICAN EXPRESS Total Credit Cards 983.81 Other Current Liabilities $98131 230-21100 ACCRUED AUDIT EXPENSE 230-21700-1 ACCRUED PAYROLL EXPENSE 8,614-993,428.84 Total Other Current li s $��84 - ---- Total Current - — — - $16,596 77 Iotalltafles $164596.77 Accrual Basis Wednesday, November 2, 2022 10:49 AM GMT-05:00 112 Community Housing Corporation of America, Inc. Statement of Financial Position As of September 30, 2022 Equity TOTAL 300-28000 CAPITAL CONTRIBUTIONS 300-28180 Fund Balance 2,340,702.00 300-29400 PARTNERS CAPITAL -910,515.25 300-29500 RETAINED EARNINGS -1,289,267.0030,801,929.58 Net Revenue ?otaLEg4uiy ' 17,725,243.47 TOTAL 1LAflIL.LTMAM EQUITY $48,668 092.80 $48,.684.689 ii7 Accrual Basis Wednesday, November 2, 2022 10:49 AM GMT-05:00 2/2 What We Do Community Housing Corporation is a nonprofit company that seeks out opportunities to create and maintain affordable housing. CHC identifies and develops properties and works with local governmental agencies to turn them into affordable housing for seniors, families, and individuals. Community Housing Corporation is proud to provide well maintained and attractive affordable housing. We have invested more than $3.6 Million over the last three years in capital improvements in our Texas properties and over $500,000 in our Minnesota properties in 2017. In addition, in 2017 CHC purchased 54 units of project -based Section 8 housing located in Minnetonka and Golden Valley, MN - Elmbrooke and Golden Valley Townhomes. CHC is investing significant funding into capital improvements in these facilities. CHC contracts with Shelter Corporation, which manages CHC properties and works with CHC to provide beautiful living spaces for low and moderate income individuals and families across the country. CHC's apartment buildings offer a range of amenities for the individuals and families we serve. These vary by property but may include: • In -unit washers and dryers • Fireplaces • Walk-in closets • Community gardens • Swimming pools • Adjacent daycare centers, kid's clubs, and playgrounds • Private patios, sundecks, and balconies • Walking paths and picnic areas with grills • Business centers • Fitness centers and basketball courts We are guided by a four -member Board of Directors comprised of experts in the field of housing and real estate management and development. Their expertise includes marketing, finance, community involvement and government administration and regulation. Website Design by llluminAge Copyright © 2022 Community Housing Corporate, All rights reserved 161 St Anthony Avenue, Suite 825 I St Paul, MN 55103 Our Leadership Our Staff: Wesley Butler, Executive Director 651.605.5222 Our Board: Susan Landwehr Marshall - President Ken Johnson Richard Martin Happy Nelson Website Design by IlluminAge Copyright © 2022 Community Housing Corporate, All rights reserved 161 St Anthony Avenue, Suite 825 1 St Paul, MN 55103 EDA Agenda: 11 /09/22 8. Consideration of 2022 CEDS Update (JT) A. REFERENCE AND BACKGROUND The four county Region 7W CEDS (Comprehensive Economic Development Strategy) document is required to be updated every five years. Region 7W includes Wright, Sherburne, Stearns, and Benton counties. The current Region 7W CEDS was completed in late 2017 and submitted to the US Economic Development Administration (EDA) at that time. The recent CEDS update process began in mid-2022 with open forums held in the St. Cloud area to identify needs and prioritize goals to be included in the update. City staff attended these sessions. The draft CEDS document is now available to review and accept public comment. The public comment period is 30 days (November 1, 2022 to December 1, 2022). The goal of the ad -hoc volunteer Region 7W CEDS subcommittee is to finalize the CEDS Update and submit it to US-EDA by mid -December 2022. Staff also offered the Monticello Industrial Economic Development Committee (IEDC) an opportunity to review and comment on the CEDS document at the November 1, 2022 meeting. Comments offered by the IEDC and the EDA will be conveyed, to the CEDS Update Subcommittee for consideration of inclusion in the final document. Al. Staff Impact: Limited A2. Budget Impact: None B. ALTERNATIVE ACTIONS 1. Review and discussion only C. STAFF RECOMMENDATION No motion is required. This is an opportunity for the EDA members to review and offer comment on the 2022 CEDS update document. D. SUPPORTING DATA a. DRAFT V1 —Region 7W 2022 CEDS Document IM BENTON COUNTY � SHERBURNE (COUNTY .-u -ry I/ L -.. I-k Wright County M I N N E S O T A A collaborative regional strategic planning effort. TABLE OF CONTENTS INTRODUCTION 1 SIGNIFICANT INDUSTRY TRANSITIONS 22 What is the CEDS? Electrolux Plant Closure Vision Sherco Decommissioning Stakeholder Involvement & Public Engagement Future of MNGP Region 7W Summary Sartell Paper Mill ACKNOWLEDGEMENTS 2 S.W.O.T. ANALYSIS 25 REGIONAL OVERVIEW Demographics Population Change, 2016-2021 Population Change, 1980-2021 Population by Age Group, 2016-2021 Population Projections by Age Group, 2023-2053 Population by Race, 2021 Labor Force Labor Force Change, 2012-2021 Labor Force Projections, 2023-2033 Employment Characteristics, 2020 Unemployment Rate, 2013-2021 Jobseeker Per Vacancy, 2009-2019 Educational Attainment by Age Group, 2020 Commute Shed & Labor Shed, 2019 Income, Wages, and Occupations Household Incomes, 2020 Per Capita Incomes, 2020 Cost of Living, 2021 Wages & Occupations, 2021 Job Vacancy Survey, 04 2019 Occupations in Demand, 2022 Employment Projections, 2020-2030 STRATEGIC DIRECTION & ACTION PLAN 3 MADO & DevelopMN Human Capital 27 Labor Force Context, Goal & Strategies Education & Skills Attainment Economic Competitiveness 28 Business Growth 6 Entrepreneurship Community Resources 30 Arts & Culture Tourism Natural Resources Foundational Assets 32 Broadband 11 Transportation Housing Water Ouality/Wastewater Infrastructure Economy 18 Industry Employment, 2021 Distinguishing Industries, 2021 Industry Projections, 2020-2030 Employers by Size Class, 2020 Nonemployer Establishments, 2019 Census of Agriculture, 2017 ECONOMIC RESILIENCE 36 IMPLEMENTATION AND EVALUATION 39 PUBLIC COMMENT & CONTACTS 41 WHAT IS THE CEDS? According to U.S. Economic Development Administration, the Comprehensive Economic Development Strategy (CEDS) contributes to effective economic development in America's communities and regions through a locally - based, regionally -driven economic development planning process. Economic development planning — as implemented through the CEDS — is not only a cornerstone of the U.S. Economic Development Administration's (EDA) programs, but successfully serves as a means to engage community leaders, leverage the involvement of the private sector, and establish a strategic blueprint for regional collaboration. The CEDS provides a vehicle for individuals, organizations, local governments, institutes of Learning, and private industry to engage in a meaningful conversation and debate about what capacity building efforts would best serve economic development in the region. 1&1111►27 Region 7W strives to foster a prosperous region that creates new business and employment opportunities essential for economic growth. Economic development strategies will drive the creation, retention, and reinvestment of resources that increase the economic opportunities and improve the quality of life for Region 7W citizens. STAKEHOLDER INVOLVEMENT AND PUBLIC ENGAGEMENT Public and private sector economic and community development leaders throughout the region participated in meetings focused on developing goals and strategies around the four cornerstones of community and economic health identified by DevelopMN. Key professionals in Region 7W made a collaborative effort to ODUCTION promote the CEDS planning process at economic and community development meetings in the region. DevelopMN was created to, "Help identify needed alignment and document a broadly supported strategy for creating shared prosperity." The purpose is to create regional alignment to take advantage of shared priorities and maximize the use of resources (mnado.ora). The four cornerstones of human capital, economic competitiveness, community resources and foundational assets are discussed in detail in the strategic direction and action plan section of this document. Region 7W Summary Region 7W is composed of Benton, Sherburne, Stearns, and Wright Counties, centrally located in the State of Minnesota. Taking up nearly 3,000 square miles of land, the region is home to many lakes, city, and county parks, and is an industry leader in agriculture across the state. The Mississippi River cuts through the center of the region, which is also served by the railway and a regional airport. Manufacturing is the strongest industry in the region, while also emerging strongly in the areas of high -quality education, health care and human services. There is a more comprehensive demographic and economic profile ahead in the Regional Overview section of this document. 1 ACKNOWLEDGEMENTS ACKNOWLEDGEMENTS The 7W CEDS Staff Committee served as the Strategy Committee to steer the development of the CEDS document. The committee is composed of stakeholders across Region 7W that broadly represent the economic interest of the region. Thank you to all those who contributed to the development of the CEDS. Region 7W CEDS Strategy Committee Jessica Barthel, Sherburne County Government Tricia Bigaouette, CMJTS, Workforce Development Barb Chaffee, CMJTS Neil Fortier, Stearns County Government Jolene Foss, Wright County Government Luke Greiner, State of Minnesota- DEED Steve Hammes, Stearns County Government Don Hickman, Initiative Foundation Hannah KLimmek, City of Big Lake Greg Lerud, City of Becker Cathy MeheLich, City of St. Cloud Josh Mollan, City of Elk River Brent O'Neil, City of Elk River Mark Osendorf, Xcel Energy Amanda Othoudt, Benton County Government Marie Pflipsen, Xcel Energy Lyndsey Stram, City of St. Cloud Jim Thares, City of Monticello Dan Weber, Sherburne County Government Clay WiLfahrt, Wright County Government Michael Williams, Stearns County Government 2 DEMOGRAPHICS Population Change, 2016-2021 Region 7W is located in the larger 13 county Central Minnesota planning region and averaged nearly 12 new residents every day for the Last 5 consecutive years. Wright County and Sherburne County have remained the fastest growing counties for the region. Region 7W was home to 444,325 Minnesota residents in 2021 increasin REGIONAL OVERVIEW Table 1. Po ulation Chan a from 2016-2021 Population2016 AL M�A&umber M- Region 7W 422,464 444,325 21,861 5.17% Benton Co. 39,687 41,459 1,772 4.46% Sherburne Co. 93,228 99,074 5,846 6.27% Stearns Co. 157,225 158,947 1,722 1.10% Wright Co. 1 132,324 144,8451 12,521 9.46% Minnesota 5,522,744 5,707,3901 184.646 3.34% Source: DEED Quarterly Census of Employment & Wage (QCEVV) 9 population by 5.17 percent in the last five years (see Table 1). The Region's population growth far outpaced the state of Minnesota, which experienced a 3.34 percent population increase since 2016. Population Change, 1980-2021 The state of Minnesota has grown consistently over the past forty years, picking up an average of just over 400,000 new residents every decade. Region 7W grew remarkably from 1980 to 2010. While still experiencing significant growth from 2010-2021, the pace of growth did slow through this period increasing by only 42,033 residents as compared to an average of 60,000 new residents the previous three consecutive decades. All four counties were among the fastest growing counties in the state in terms of growth rate, led by Wright County which Lands at eighth place overall, Sherburne at tenth place, and Stearns coming in at eleventh place. In 2021, Region 7W accounted for 7.8 percent of the state of Minnesota's population (see Figure 1). This is just a slight uptick from the 2016 data which put the region making up 7.6 percent of Minnesota's population. REGIONAL OVERVIEW Population by Age Group, 2016-2021 Region 7W as compared to the state, has a _ __ _ younger population. People aged 34 years and under make up 47.9 percent of Region 7W's population as compared to the same age group comprising only 44.9 percent of the state of Minnesota's population. 14 percent of Region 7W's population are age 65 and over, as compared to the states over 65 population which is 16.7 ,. _ ,. a ., percent. Region 7W and the state of Minnesota have a very comparable population make up for ages 35-64, varying by only two - tenths of a percent (see Figure 2). According to the data in Figure 3, Region 7W's population has increased by 6,402 people in the age range of 35-44 years, and by 5,427 people in the 55-64 age range. These two age sectors alone make up 11,829 people or 52 percent of the region's overall growth from 2016- 2021. The region is also seeing a significant increase in the retirement age population, also known as the Baby Boomers. The Baby Boom generation are people born between 1946 and 1964 and between the ages of 57-75 in 2021. In an article titled, Aging baby boomers expected to impact Minnesota's workforce, author Liz Stoever states, "As baby boomers age, private and state workforces are poised to face massive retirements." The population in the age range of 45-54 experienced the largest decrease in people with a loss of 3,723. REGION 7W 2022 COMPREHENSIVE ECONOMIC MF EVELOPMENT STRATEGY Population Projections by Age Group, 2023-2053 Region 7W is projected to continue to grow at a consistent pace over the next thirty years (see Figure 4). The region's growth will be most robust from 2023-2033, projecting a population increase of 33,993 people. From 2033 to 2043, projections predict a population increase of 27,097 people, and from 2043- 2053 an increase of 22,567 people is predicted. Region 7W is _ c:= _cn still projected ' ^ - to retain and increase a higher �- percentage of people that are between 52,666 the ages of 5 60,011197 and 44 which " 64,568will make up 43 percent of the population 30,000 31,340 33,069 34,278 growth over the next 30 years. This compared to people under the age of 5 representing less than 1 percent of the overall projected growth of Region 7W. Also notable, is that the population of people over the age of 85 is expected to more than double from 8,128 people in 2023 to 20,527 people by 2053. Population by Race, 2021 R Table 2. Race and Hispanic Origin, 2015 & 2021 Total 444,325 100% 8.13% 5,707,390 100% 4.1% White 400,137 90.1% 4.6% 4,735,626 83.0% 1.3% Black or African American 23,836 5.4% 145.3% 423,565 7.4% 25.7% American Indian & Alaska Native 2,350 0.5% 37.0% 79,214 1.4% 7.1 % Asian & other Pac. Islander 8,454 1.9% 46.2% 311,620 5.5% 17.1 % Two or More Races 9,548 2.1 % 23.5% 157,274 2.8% 20.9% Hispanic or Latino 15,541 3.5% 41.8% 333,474 5.8% 17.4% egion 7W s population is less diverse than the state's but is increasing in diversity over time. In 2021, 23,836 people reported as Black or African American, that is an increase of 1453%f 2015 Will Region 7W outpaced the state of Minnesota in terms of increasing diversity in all measured races by more than two times over except for people reporting Two or More Races alone (see Table 2). REGION 7W 2022 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY LABOR FORCE Labor Force Change, 2012-2021 According to data from DEED's Local Area Unemployment Statistics (LAUS) program, Region 7W experienced steady growth in the size of the available labor force from 2000-2020, peaking at 249,673 available workers. Data recorded for 2021 shows the impact of the Covid-19 pandemic on the workforce, showing a steep decline to 234,780 workers, a Loss of about 6.3%. The Labor Force Projections, 2023-2033 Region 7W's population is expected to increase over the next 30 years (see Figure 4), so is the region's labor force expected to increase by 4.1 percent over the next decade. The region will be experiencing a major shift in the age composition of the workforce. Projections show gains in workers ages 16 to 54 and over the age of 65. The labor force over the age of 65 is projected to increase substantially over state of Minnesota experienced a very similar loss to the labor force at 6.4% decline (see Figure 5). Table 3. Region 7W Labor Force Projections, 2023-2033 oil. 191111 151603 il 15,761 1. 158 1.0% 16 to 19 years 20 to 24 years 28,539 29,668 1,129 4.0% 25 to 44 years 102,078 107,762 5,684 5.6% 45 to 54 years 47,665 51,917 4,252 8.9% 55 to 64 years 40,718 36,597 4,121 -10.1% 65 to 74 years 10,208 12,298 2,090 20.5% 75years & over 1,888 2,774 886 46.9% Source: calculated from Minnesota State Demographic Center population projections & 2016-2021 American Community Survey 5-Year Estimates the next ten years. However, there is significant loss in workforce projected for ages 55 to 64 (see Table 3). This is the result of the Baby Boom generation making their way through the population pyramid. The shift in the age composition of Region 7W's workforce will likely lead to a tight labor market and employers will need to respond to the lack of workforce availability. REGION 7W 2022 COMPREHENSIVE ECONOMIC VELOPMENT STRATEGY Em- � 04 Employment Characteristics, 2020 Table 4. Ern Employment Characteristics 2020 16 to 19 ars 15,238 58.8% 9.9% 52.0% 11.0% 20 to 24 ars 27,189 86.1% 5.6% 83.8% 6.2% 25 to 44 years 100,213 89.5% 2.9% 88.7% 3.4% 45 to 54 years 49,761 90.5% 2.4% 87.6% 2.8% 55 to 64 years 39,338 74.4% 2.9% 73.0% 3.1% 65 to 74 years 1 8,5371 25.5% 1.8% 28.4% 2.5% 75 years & over 1 1,5471 6.4% 0.7% 6.8% 2.4% White alone 220,840 72.2% 3.0% 68.9% 3.2% Black or African American 8,741 74.3% 13.5% 71.3% 8.7% American Indian & Alaska Native 476 50.8% 7.0% 57.9% 12.7% Asian or Other Pac. Islanders 4,318 78.6% 5.7% 72.0% 4.0% Some Other Race 2,9431 72.0% 2.6% 72.7%1 6.2% Two or More Races 4,472 73.9% 7.3% 73.3% 7.1% Hispanic or Latino 6,804 79.1% 3.9%1 76.5% 6.3% Veteran 18 to 64 ars 1 9,449 1 81.8% 4.0%1 79.5% 4.0% With any Disability,20 to 64 years 11,2531 54.7% 7.3%1 52.9% 8.9% Population, 25 to 64 years 189,302 86.1% 2.8% 84.4% 3.2% Less than H.S. Diploma 8,925 71.3% 3.6% 66.3% 4.5% H.S. Diploma or Equivalent 45,302 80.8% 2.0% 77.9% 2.5% Some College or Assoc. Degree 75,374 88.1% 3.0% 85.2% 3.3% Bachelor's Degree or Higher 59,752 1 90.9% 1.3% 90.0% 1.9% Source: 2016-2020 Am ericon Community Survey 5-Venr Estimates Region 7W has 72.2 percent of people aged 16 years and over participating in the labor force, three percent higher than the state participation rate. Region 7W has a higher labor force participation rate for workers aged 16 to 64 years old but falls below the state Labor force participation rate for workers aged 65 years and older. Region 7W has low unemployment rates in all age brackets as compared to the state of Minnesota, even in the age range of 65 to 74 years and 75 years and over where the unemployment rates are 1.8 percent and .7 percent, respectively (see Table 4). Since the 2017 CEDS report, Region 7W has made significant progress in shrinking the unemployment rate in every minority group. American Indian & Alaska Native and Hispanic or Latino populations Lowered the unemployment rate by two-thirds. Region 7W is experiencing an 8.5 percent increase in labor force participation by Black or African American workers since the 2017 CEDS report and a 7.2 percent increase in labor force participation for Hispanic or Latino workers, landing the labor force participation rates at 74.3 percent and 79.1 percent, respectively. Unemployment Rate, 2013-2021 Region 7W's unemployment rate has tracked closely with the state of Minnesota's unemployment rate, either matching or coming in less than the state for the last 8 consecutive years (see Figure 6). According to DEED's Local Area Unemployment Statistics, both Region 7W and the state of Minnesota saw unemployment rates more than double in 2020 because of the Covid-19 pandemic. Remarkably, both the region and the state experienced near full recovery by 2021. L N 7W 2022 COMPREHENSIVE ECONOMIC VELOPMENT STRATEGY Iq Region 7W Jobseekers per Vacancy, 2009-2019 EDR level Job Vacancy Survey (JVS) data was not produced by the state of Minnesota after 2019. As a result, there are data presented for Region 7W thru 2019 and Central Minnesota thru 2021. The Labor market remained tight since the 2017 CEDS report. In 04 of 2018, the region reported having more job vacancies than unemployed job seekers. In 04 of 2019, the labor market remained incredibly tight with 9,483 job vacancies reported, with only 9,971 unemployed jobseekers looking for employment (See Figure 7). The most recent data does not include the impact of the Covid-19 pandemic on the labor market, but as Figure 6 above shows an unemployment rate of 3.8 percent that is indicative of an increasingly tight labor market. Central Minnesota Jobseekers per Vacancy, 2011-2021 Region 7W is included in JVS data for Central Minnesota and has statistically trended with Central Minnesota. Figure 7.1 illustrates the effect of the Covid-19 pandemic on job vacancy as we see a spike in unemployment in 2020. Figure 7.1 also illustrates in 2021 when workers re- entered the workforce post - pandemic. A major shift in workforce patterns emerged as job vacancies reached a ten year high, while unemployment simultaneously reached a ten year low creating one of the tightest labor markets the region has seen in well over a decade. The amount of job vacancies coupled with the low jobseekers- per-vacancy rate depicts the mass exit of the workforce the Covid-19 pandemic caused. REGION 7W 2022 COMPREHENSIVE ECONOMIC EVELOPMENT STRATEGY Educational Attainment by Age Group, 2020 Region 7W has a greater population of young people aged 18 to 24 years old in comparison to the state of Minnesota. The region's younger population is demonstrating a commitment to higher education with 44.54 percent of people in this age bracket attending some college but having not yet received their degree. This is 6.22 percentage points higher than the state average for the same category (see Table 5). Region 7W also experienced an increased percentage in high school graduates for people aged 25 to 44 as 22.14 percent of this age group has a high school diploma or equivalent as compared to the 2017 CEDS, which reported 19.9 percent for the same category. Region 7W has a higher percentage of people in the 25 to 44 and 45 to 64 age groups who have obtained some college, no degree and an associate's level education, but much lower levels of people with a bachelor's or advanced level degree in comparison to the state percentages. Table 5. Educational Attainment bAge Group, 2020 .":.cow, Less than high school 4,437 9.93% 11.80% High school grad. incl. equiv.) 12,401 27.75% 28.46% Some college, no degree 19,903 44.54% 38.32% Associate's degree 3,588 8.03% 6.80% Bachelor's degree 4,058 9.08% 14.60% Advanced degree T„ 297 0.66% ', 0.74% , Less than high school 5 734 5.12% 6.20% High school grad. incl. equiv.) 24,782 22.14% 18.31 % Some college, nodegree 25,084 22.41% 19.42% Associate's degree 19,353 17.29% 13.44% Bachelor's degree 26,258 23.46% 29.30% Advanced degree 10,132 9.05% 13.33% ..• O Less than high school 6,169 5.72% 5.90% High school grad. incl. equiv.) 31,284 29.01% 24.45% Some college, no degree 26,398 24.48% 21.80% Associate's degree 14,676 13.61 % 12.41 % Bachelor's degree 20,087 18.63% 22.83% Advanced degree 9,234 8.56% 12.61 % Less than high school 6,921 12.05% 8.55% High school grad. incl. equiv.) 22,993 40.04% 33.67% Some college, nodegree 12,195 21.24% 21.30% Associate's degree 3,684 6.42% 7.21 % Bachelor's degree 7,391 1 12.87%1 17.86% Advanced degree 4,241 1 7.39%1 11.42% Source: 2016-2020 American Community Survey 5-Year Estimates Also notable is the increase in people with associate's degrees, bachelor's degrees, and advanced degrees in the age brackets of 45 to 64 years and 65 years and over for both Region 7W and the state of Minnesota. Since the 2017 CEDS report, all three levels of advanced education for both age brackets increased percentages of attainment demonstrating an increase in the older population holding college degrees. Data has demonstrated that people are staying in the workforce longer. As the Baby Boomers come through the age brackets, we will continue to see an increase in education attainment levels for people holding college degrees in the 65 years and older workforce. REGION 7W 2022 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY Commute Shed and Labor Shed, 2019 According to the commuting data from the U.S. Census Bureau, Region 7W continues to be a net labor exporter, having more workers than available jobs with a net outflow of 39,503 workers. There are 43,112 people who are employed in Region 7W but live outside the area as compared to L Akin th t f Table 6. Region 7W Inflow/Outflow Job Counts All Jobs , 2019 e Employed in the Selection Area 140,426 100% Employed in the Selection Area but Living Outside 43,112 30.70% Employed and Livingin the Selection Area 97,314 69.30% LivingPr in the Selection Area 179,929 100% Living in the Selection Area but Employed Outside 82,615 45.92% Livin and Employed in the Selection Are 97,314 54.08% Source: U.S. Census Bureau, OnTheMap near y ou e e amoun o people at 82,615, who live in Region 7W but are employed outside of the region. Despite having the lowest growth rate percentage of all 4 counties in Region 7W (see Table 1), Stearns county remains the Largest county in the region. St. Cloud remains the largest draw for workers into Stearns County while Benton, Sherburne, and Wright counties have labor outflows primarily to the Twin Cities metro area and St. Cloud (see Table 7 & Figure 8). 8. Reeion 7W Labor and Commute Table 7. Region 7W Commuting Patterns our Outside Workers 7W Livel ResidentsWhere ere to Work County Hennepin Number/Percent 7,764 (5.5%) County Hennepin Number/Percent 45,348 (25.2%) Anoka 3,915 (2.8%) Anoka 8,170 (4.5%) Morrison 3,617 2.6% Ramse 6,611 3.7% Mille Lacs 2.957 2.1% Dakota 3,116 1.7% Source: U.S. Census Bureau, OnTheMap ied, 2019 Y #� 4 - r ♦ F j 82,615 4 97,31 4 IONAL OVERVIEW INCOMES, WAGES, AND OCCUPATIONS Household Incomes The median household income for the state of - Minnesota was $73,382 in 2020. Region 7W surpassed the state median income with a regional median income of $75,563. Sherburne County led the region with a median income of $88,671, followed closely by Wright County at $87,882, then Stearns County at $65,244 and Lastly Benton County at a median income level of $60,564. The difference in income is attributed to Sherburne and Wright Counties closer proximity to the Twin Cities Metro area than Benton and Stearns Counties. Also, both Sherburne and Wright Counties have several major highways improving access and travel times to the Twin Cities Metro for commuters. Region 7W has seen a decrease in the percentage of household incomes that are less than $50,000 since 2015 dropping from 37.6 percent to 31.8 percent for the region. In contrast, there is an even larger percentage increase to households in the region that have median incomes higher than $100,000, moving from 25.8 percent in 2015 up to 35.1 percent in 2020. Per Capita Incomes The per capita income average for Region 7W is $34,132. The state of Minnesota's per capita income is $38,881, that's $4,749 more than the regional average. Wright County has the highest per capita income at $37,416, Benton County has the Lowest per capita income at $31,515 only $59 lower than Stearns County (see Figure 10). REGIONAL OVERVIEW Cost of Living According to DEED's Cost of Living tool, the basic needs budget for an average Minnesota family (which consists of two adults and one child, with one full-time and one part-time worker) was $60,540 in 2021. The cost of living for a similar family in Region 7W was $57,780. Region 7W is still holding at the third highest cost of living of the 13 Economic Development Regions in the state behind Twin Cities Metro and Region 7E- East Central. The highest monthly costs were housing, transportation, and food. Since the 2017 CEDS report, the cost of housing in Region 7W has seen a 22% increase. Table 8. Famil rl Cost er Hourl Wa e, and Fam Monthly Costs 021:1 FT & 1PT Worker, 1 child Region 7W $ • VAT ; to 57,780 $ 18.52 $ 431 $ 799 $ QN 558 $ 1,115 $ 827 $ 524 $ 561 Minnesota $ 60,540 1 $ 19.40 $ 579 1 $ 822 1 $ 561 1 $ 1,151 1 $ 772 1 $ 540 1 $ 620 Source: DEED Cost of Living Tool The yearly cost of living rises significantly when analysis is run for a family of two full-time workers and two children (see Table 9 below). For Region 7W, the yearly increase amounts to $30,300 more dollars or more than 50 percent as compared to the cost of living for a family with one full-time worker, one part- time worker and one child. Table 9. Farnily Yearly Cost, Worker Hourly Wage, and Fam Monthly Costs, 2021: 2 FT workers, 2 children -. Re ion 7W $ 88,080 $ 21.17 $ 1,558 $1,044 $ AM M.1 Mule M.Rk 568 $ 1,569 $ 873 $ 715 $1,013 Minnesota $ 94,164 $ 22.64 1 $ 1,905 $1,073 $ 571 $ 1,602 $ 814 $ 732 $1,150 Source: DEED Cost of Living Tool To meet the base cost of living for the region, the workers in the family would need to earn $18.52 per hour for a family of three (see Table 8). The hourly wage required to meet the yearly cost of living in Region 7W increases to $21.17 for a family of four to meet the basic needs standard of living. Both required wage scenarios are below the required hourly wage for same family size average for the state of Minnesota. This is an indicator that the family yearly cost of living is less in Region 7W as compared to the state of Minnesota's family yearly cost of living. 12 REGION 7W 2022 COMPREHENSIVE ECONOMIC EVELOPMENT STRATEGY Wages and Occupations According to DEED's Occupational Employment Statistics program, the median hourly wage for all occupations in Region 7W is $25.60 in 2021, which was the third highest wage level of the 13 EDR's in the state. The wage gap has widened between Region 7W and the state as a whole. In 2019 the region was $6.22/hr below the state hourly wage median, current data shows the region is now $6.68/hr behind the state for 2021. The 2019 data indicated that Region 7W's median hourly wage was $9.52/hr below the median hourly wage in the neighboring seven -county Twin Cities metro area, which amounted to just over $19,800 per year less income for a full-time worker. The region has also increased the gap in wage to $10.15 per hour or about $21,112 per year for a full-time worker (see Table 10 below). This also helps to explain the Labor and Commute Shed in Figure 8. Also noteworthy, in comparison to the 2019 Quarterly Census of Employment and Wages (QCEW) data, estimated employment across all regions is decreasing. Likely this is the lasting impact of the Covid-19 pandemic. Table 10. Occupational Employment Statistics by Region, 2021 EDR 1 - Northwest . • - $ 24.55 - • ' - • - 34,899 . • - $ 21.18 - - • 36,498 - • -1,599 EDR 2 - Headwaters $ 23.20 29,729 $ 20.18 32,557 -2,828 EDR 3 -Arrowhead $ 25.15 132,143 $ 22.45 143,683 -11,540 EDR 4 - West Central $ 22.73 87,665 $ 20.28 91,167 -3,502 EDR 5 - North Central $ 22.68 61,103 $ 19.03 63,013 -1,910 EDR 6E - Southwest Central $ 23.05 50,219 $ 20.55 53,346 -3,127 EDR 6W- Upper MN Valley $ 21.30 15,893 $ 18.70 17,248 -1,355 EDR 7E - East Central $ 22.08 45,217 $ 19.48 48,763 -3,546 EDR 7W - Central $ 25.60 170,695 $ 22.43 176,369 -5 674 EDR 8 - Southwest $ 22.60 52,199 $ 20.18 53,233 -1,034 EDR 9 - South Central $ 23.70 100,353 $ 21.23 106,122 -5,769 EDR 10 - Southeast $ 28.30 236,684 $ 25.58 246,808 -10,124 EDR 11 - 7-County Twin Cities $ 35.75 1,676,409 $ 31.95 1,776,439 -100,030 State of Minnesota $ 32.28 2,759,918 $ 28.65 2,901,632 -1415714 Source: DEED EDR QCE W REGION 7W 2022 COMPREHENSIVE ECONOMIC VELOPMENT STRATEGY • Wages and Occupations continued About 10 percent of jobs in Region 7W were classified as production jobs, according to DEED's Occupational Employment Statistics for 01, 2022. For Region 7W, this is 2.6 percentage points higher concentration than the state of Minnesota. Region 7W also had a higher concentration of Sales & Related jobs, Transportation & Material Moving, Education, Training & Library, and Food Preparation & Servicing jobs (see Table 11). The highest paying jobs in the region are in Management at a median hourly wage of $46.37, Architecture & Engineering at $38.80, Healthcare Practitioners at $38.74, and Computer & Mathematical at $38.06. Jobs in these categories primarily have higher education and training requirements. The lowest paying jobs in the region are in Food Preparation & Serving at $14.40 per hour, Personal Care & Service at $15.11, and Sales at $15.15 per hour. The state of Minnesota has a higher median hourly wage in every occupation sector when compared to Region 7W, except in Community & Social Service and Protective Service occupations. Table 11. Region iW Occupational Em to ment Statistics Est Qtr. 2022 State of Minnesota 165,010 100% 1.0 $ 23.81 2,695,450 100°I Total, All Occupations $22.94 Office & Administrative Support $21.55 19,020 11.5% 0.9 $ 23.12 334,550 12.4% Production $19.76 16,520 10.0% 1.4 $ 22.22 198,940 7.4% Sales & Related $15.15 16,380 9.9% 1.9 $ 24.27 245,390 9.1 % Transportation & Material Moving $19.20 15,860 9.6% 1.2 $ 22.49 209,780 7.8% Education, Training & Library $24.68 10,590 6.4% 1.2 $ 29.37 149,990 5.6% Healthcare Practitioners & Technical $38.74 11,090 6.7% 1.0 $ 48.71 190,180 7.1 % Food Prep. & Servicing Related $14.40 13,790 8.4% 1.1 $ 15.70 198,800 7.4% Construction & Extraction $30.01 9,760 5.9% 1.5 $ 31.31 107,180 4.0% Management $46.37 8,750 5.3% 0.8 $ 50.51 181,090 6.7% Installation, Maintenance & Repair $24.65 6,640 4.0% 1.1 $ 27.97 96,660 3.6% Personal Care & Service $15.11 3,410 2.1% 1.0 $ 17.91 56,580 2 1% Business & Financial Operations $31.45 7,260 4.4% 0.6 $ 41.09 192,700 7.1 % Building, Grounds, Cleaning & Maint. $17.68 4,870 3.0% 1.0 $ 18.59 75,850 2 8% Healthcare Support $15.35 8,960 5.4% 0.9 $ 17.40 162,530 6.0% Computer & Mathematical $38.06 2,080 1.3% 0.3 1 $ 47.96 101,560 3.8% Community & Social Service $29.16 2,510 1.5% 0.8 $ 27.64 53,670 2.0% Protective Service $29.68 2,400 1.5% 1.0 $ 28.50 40,580 1.5% Architecture & Engineering $38.80 1,760 1.1% 0.6 $ 43.48 51,970 1.9% Arts, Design, Entertainment & Media $23.93 1,570 1.0% 0.7 $ 30.81 36,710 1.4% Life, Physical & Social Science $36.86 930 0.6% 0.6 $ 40.61 26,140 1.0% Legal 1 $36.591 6201 0.4%1 0.5 1 $ 53.301 19,8601 0.7% Farming, Fishing & Forestry 1 $17.25 1 280 1 0.2%1 1.9 1 $ 19.85 1 4,3501 0.2% Source: DEED Occupational Employment Statistics, Qtr. 1 2022 REGION 7W 2022 COMPREHENSIVE ECONOMIC VELOPMENT STRATEGY Job Vacancy Survey Employers in Region 7W reported 9,483 job vacancies in the fourth quarter of 2019. Job vacancies are at the second highest level in the last 15 years. Most vacancies recorded are for part-time positions, many of which still require some level of post -secondary education. Industries experiencing the highest job vacancy rate are Building & Grounds Cleaning and Maintenance, and Food Preparation & Serving Related occupations, respectively. Also notable is the wage percent increase in certain occupation sectors. Building & Grounds Cleaning and Maintenance, Business & Financial Operations, and Computer & Mathematical occupation sectors have seen median hourly wages nearly double or more than double in the last three years. Table 12. Re Total, All Occupations Its, Number of Tuta , Vacancies 9,483 4th Qtr. Job Vacancy Rate 5.5% 2019 Percent Part- Time 47% Percent Temporary or Seasonal 22% Requiring Post. Secondary Education 24% Requiring 1 Plus Years of Experience 38% Requiring Certificate or License 34% 2019 Median Hourly Wage $16.78 2016 Median Hourly Wage $ 12.33 Wage Change Percent 2016-2019 36% Building & Grounds Cleaning, Maintenance 1,424 25.3% 92% 84% 0% 15% 4% $26.43 $ 11.44 131% Sales and Related 1,365 6.9% 35% 17% 5% 27% 2% $14.60 $ 11.45 28% Food Preparation and Serving Related 1,265 12.9% 60% 7% 3% 35% 15% $13.43 $ 10.58 27% Personal Care and Service 696 9.6% 76% 8% 2% 9% 58% $12.27 $ 11.86 3% Construction and Extraction 658 6.9% 5% 8% 85% 97% 95% $29.32 $ 17.66 66% Office and Administrative Support 617 2.3% 52% 11% 19% 59% 9% $15.92 $ 11.25 42% Production Occupations 613 2.7% 5% 0% 23% 36% 6% $14.99 $ 15.01 0% Healthcare Practitioners and Technical 499 3.5% 35% 3% 80% 41% 97% $21.27 $ 20.17 5% Healthcare Support 453 7.4% 70% 2% 20% 16% 76% $14.38 $ 11.98 20% Transportation and Material Moving 406 2.9% 43% 19% 1% 30% 79% $17.86 $ 13.12 36% Installation, Maintenance, and Repair 333 4.0% 16% 0% 12% 43% 25% $16.77 $ 14.65 14% Education, Training, and Library 284 2.0% 58% 73% 73% 84% 92% $16.16 $ 16.04 1% Business and Financial Operations 271 4.1% 0% 0% 76% 29% 4% $28.68 $ 13.68 110% Management Occupations 145 1.6% 1% 1% 47% 97% 31% $29.45 $ 31.29 -6% Community and Social Service 127 4.8% 35% 9% 46% 65% 75% $17.24 $ 18.16 -5% Computer and Mathematical 121 3.8% 1% 0% 90% 99% 8% $43.28 $ 22.57 92% Arts, Design, Entertainment, Sports, Media 69 3.3% 66% 18% 28% 30% 75% $17.44 $ 15.38 13% Architecture and Engineering 43 1.6% 3% 0% 94% 91% 25% $30.09 $ 25.70 17% Protective Service Occupations 35 1.4% 69% 24% 10% 54% 64% $12.11 $ 10.70 13% Life, Physical, and Social Science 25 2.8% 0% 25% 88% 84% 68% $30.15 $ 30.84 -2% Legal Occupations 13 2.0% 0% 0% 80% 100% 78% $24.67 none Source: DEED Jo b Vacancy Survey, Qfr. 4 20 i 9 Minnesota's Department of Employment and Economic Development (DEED) discontinued the production of Job Vacancy Survey (JVS) results for Economic Development Regions (EDR) at the end of 2019. The JVS data for EDR's is now part of the Minnesota Planning Regions. For Region 7W that means our JVS data is e12.1CentralMNJobVacanc Surve Results Qtr.42021 represented in the Requiring Requiring 1 RMIN Cb 77 lllllllll7J. b Percent Percent Post- Plus Years Requiring Hourly Central Minnesota Total Vacancies 21,410 Vacancy Rate 8.1 Part- Time 27% Temporary Secondary Of Certificate or Seasonal Education Experience or License 14% 25% 38% 38% Wage Offer $ 17.26 Total, All Occupations Mana ement Occupations 442 3.3 20% 14% 54% 85% 29% $ 28.11 Business and Financial O erations Occu ations 422 4.1 32% 50k 51°k 67% 560k $ 26.82 Com uter and Mathematical Occu ations 79 2.7 0% 6% 73% 90% 32% $ 29.29 Architecture and Engineering Occupations 258 7.7 0°% 0% 45% 46°% 41% $ 20.98 Life, Ph sical, and Social Science Occu ations 79 5.3 3% 4% 99% 87% 84% $ 30.71 CommUnit and Social Service Occu ations 494 9.7 21°% 60k 62% 56°% 95% $ 18.61 Legal Occupations 17 1.7 0% 1 % 100% 100% 70% $ 29.20 Educational Instruction and Libra Occu ations 894 5.4 1 B% 30% 71% 61 % 80% $ 17.28 Arts, Design, Entertainment, S orts, and Media Occu. 160 7.2 14% 4% 12% 89% 39% $ 18.57 Healthcare Practitioners and Technical Occupations 2,021 11.8 20% 11% 93% 62% 90% $ 25.51 Healthcare Su ort Occu ations 973 5.8 46°% 9% 30% 26°% 580k $ 15.69 Protective Se v ce Occu ations 197 4.7 29% 2% 40% 63% 85% $ 22.39 Food Preparation and ServingRelated Occupations 4,417 20.2 36°% 1 °k 1 °k 22°% 8°% $ 13.19 Buildingand Grounds Cleaningand Maintenance Occu. 612 8.3 47% 7% 7% 26% 52% $ 14.72 Personal Care and Service Occu ations 620 11.4 12% 4% 25% 46% 86% $ 11.49 Sales and Related Occu ations 2,028 8 640k 60k 1°% 21 °k 60k $ 13.02 Office and Administrative Support Occupations 865 2.9 22% 4% 12% 56% 22% $ 16.78 Farmin , Fishin , and Forest Occupations 228 33.1 48% 48% 10% 2% 1% $ 17.94 Construction and Extraction Occu ations 1,653 12 0% 71 % 8% 8% 15% $ 22.92 Installation, Maintenance, and Repair Occupations 816 7.9 4% 24% 11% 62% 42% $ 18.49 Production Occupations 2,175 8.3 50k 9% 20°% 43°% 14°k $ 20.13 Transportation and Material MovingOccupations 1,922 8.2 34% 12% 6% 37% 70% $ 1918. Source' DEED Job Vacancy Survey, Qfr 42021 Planning Region data, which is current as of Otr. 4 2021. As a result of the Covid-19 pandemic, the shift in workforce trends such as the uptick in part- time work in Management and Business & Financial Operations are evident in this data set. 15 REGION 7W 2022 COMPREHENSIVE ECONOMIC EVELOPMENT STRATEGY EW_ pilow! Occupations in Demand Table 13. Central Minnesota Regional Top 30 Occupations in Demand with Education Level, 2022 Retail Salespersons 1 $30,515tyr High school diploma or equivalent Fast Food and Counter Workers 2 $28,9381yr High school diploma or equivalent Home Health and Personal Care Aides 3 $31,094fyr High school diploma or equivalent Nursing Assistants 4 $38,996fyr Postsecondarynon-degree award Registered Nurses 5 $81,426tyr Associate's degree Heavy and Tractor -Trailer Truck Drivers 6 $52,0181yr High school diploma or equivalent Cashiers 7 $29,427tyr High school diploma or equivalent First -Line Supervisors of Retail Sales Workers 8 $43,5821yr High school diploma or equivalent Stockers and Order Fillers 9 $31,789tyr High school diploma or equivalent Janitors and Cleaners 10 $36,185tyr High school diploma or equivalent Licensed Practical and Licensed Vocational Nurses 11 $49,345tyr Postsecondary non -degree award Customer Service Representatives 12 $38,870tyr High school diploma or equivalent Teaching Assistant 13 $37,860fyr High school diploma or equivalent First -Line Supervisors of Food Preparation and Serving Workers 14 $39,9451yr High school diploma or equivalent Elementary School Teachers 15 $63,794tyr Bachelor's degree Laborers and Freight, Stock, and Material Movers, Hand 16 $38,843tyr High school diploma or equivalent Construction Laborers 17 $48,133tyr High school diploma or equivalent Office Clerks, General 18 $39,3321yr High school diploma or equivalent Secondary School Teachers 19 $63,5221yr Bachelor's degree Machinists 20 $51,052tyr Postsec on dary n on -degree award Maids and Housekeeping Cleaners 21 $31,917tyr- High school diploma or equivalent Miscellaneous Assemblers and Fabricators 22 $39,2821yr High school diploma or equivalent Light Truck Drivers 23 $41,535fyr High school diploma or equivalent Cooks, Fast Food 24 $29,736tyr High school diploma or equivalent Passenger Vehicle Drivers 25 $35,713tyr High school diploma or equivalent Maintenance and Repair Workers 26 $48,583tyr High school diploma or equivalent Carpenters 27 $50,504fyr High school diploma or equivalent Packers and Packagers, Hand 28 $24,883tyr High school diploma or equivalent Secretaries and Administrative Assistants 29 $47,382tyr High school diploma or equivalent Sales Representatives, Wholesale and Manufacturing 30 $64,434tyr High school diploma ore uivalent Source: DEED Occupations in Demand DEED's Occupations in Demand tool shows that there are hundreds of occupations in demand across multiple sectors and with varying educational requirements. Table 13 above depicts the top 30 occupations in demand in the Central Minnesota Region in conjunction with the occupation's median annual wage and education requirements for 2022. Currently the most in demand occupation is in Retail Sales with a median annual wage of $30,515, this wage has increased from $21,315 in 2016. Currently the highest paying in demand jobs for the Central Minnesota Region are Registered Nurses at $81,426 per year, Sales Representatives at $64,434 per year, and Elementary & Secondary School Teachers at around $63,500 per year. All these higher paying in demand occupations require either a bachelor's or associate's degree, except for a Sales Representative occupation, which has an educational requirement of a high school diploma or equivalent. REGIONAL OVERVIEW Central Minnesota Employment Projections, 2020-2030 Minnesota Department of Employment and Economic Development (MN DEED) project that the Central Minnesota planning area will experience overall growth through 2030. The Region is projected to have a need to fill 61,284 replacement openings left vacant by retirements and other career changes. In addition to the large number of replacement openings, the region is projecting 117,904 new jobs by 2030. Job sectors projected to see rapid growth are Fast Food, Nursing, Teaching, Carpenters, Truck Drivers, and Laborers (see Figure 11). Waiters & Waitresses Office Clerks, General eavy ana I Factor -Trailer Truck Drivers Customer Service Representatives c Nursing Assistants Childcare Workers Teaching Assistant Registered Nurses Cooks, Restaurants Net Job Change Maids and Housekeeping Cleaners Carpenters F !E {�:i�J:>• soma WA-3-2 fL7:a isms ifCi7 i LW 'CAS 17 REGIONAL OVERVIEW ECONOMY Industry Employment For nearly an entire decade prior to 2020, both the State of Minnesota and Region 7W experienced steady job growth: 14.2% and 18.1%, respectively. Unfortunately, because of the COVID-19 pandemic, both the state and the region suffered significant job declines in 2020. This resulted in a loss of over 240,000 jobs for the state, and over 9,300 jobs for Region 7W. In comparison, Minnesota lost roughly 9.1% of jobs in 2020, Region 7W lost about 5.5% of jobs in 2020. Minnesota and Region 7W have made great strides in recovering jobs lost because of the COVID-19 pandemic. Minnesota has gained back more than half the jobs lost, and Region 7W has gained back just under half the jobs lost. n LJ • • DEED's Quarterly Census of Employment & Wages (QCEW) program shows that Region 7W was home to 11,481 business establishments providing 172,903 jobs through 2021, with a total payroll of over $9 billion. Region 7W makes up 6.1 percent of the state's total number of jobs, but only 4.9 percent of the state's total payroll. The average annual wage across all industries in Region 7W is $53,248, which is $13,780 less than the state of Minnesota's average annual wage of $67,028. Stearns County remains the largest emplovment center in Region 7W, providinq 83,532 iobs, even though since 2016 this number Table 14. Region 7W Industr Total, All Industries Em to 11,481 nt Statistics 2021 LIM 172,903 $ 9,095,692,755.00 $ 53,248.00 .. 2,743 . . 2% Benton 1,030 17,366 $ 851,903,095.00 $ 49,452.00 197 1% Sherburne 2 321 26 588 $ 1 347 634 524.00 $ 51 740.00 1 027 4% Stearns 4 499 83 532 $ 4 595 057 095.00 $ 55 744.00 1 668 -2% Wri ht 3,631 45,417 $ 2 301 098 041.00 $ 50 960.00 3,1881 8% State of Minnesota 1 191,052 2,830,564 $ 185,969,067,414.00 1 $ 67,028.00 16,292 1 1% Source: DEED Quarterly Census of Employment& Wages (QCEIM has declined from 85,200. Benton, Sherburne, and Wright Counties collectively added 4,412 jobs in the last 5 years. 18 REGION 7W 2022 COMPREHENSIVE ECONOMIC EVELOPMENT STRATEGY Industry Employment continued Providing 27,973 jobs to the region and nearly $1.6 billion in total payroll, Health Care & Social Assistance is the Largest employing industry in Region 7W, despite experiencing a negative change in jobs since 2016 likely due to the Covid-19 pandemic. Manufacturing is the second strongest industry for employment in Region 7W, with 25,026 jobs at 707 firms providing over $1.5 billion in total payroll to workers. The Retail Trade industry has 23,469 jobs at 1,282 establishments, and experienced an average annual wage increase of $7,806 since 2016. The Accommodation & Food Service industry Lost 1,232 jobs, while experiencing growth from 723 firms in 2016 to 758 firms in 2021. Wages in this industry have historically been one of the Lowest in Region 7W and remain the second Lowest annual wage at $18,720 despite a 27.31 percent increase in annual wages since 2016. A trend that is evident in Region 7W is a very steep increase in the average annual wage across all industries. Highlighted in green are average annual wage increases of greater than 25 percent since 2016 (see Table 15). Industries that are seeing the Largest wage increases are Finance & Insurance at 44.06 percent increase, Management Companies at 32.84 percent, Other Services at 29.2 percent and Retail Trade at 28.99 percent increase. See above discussion on Figure 6 & 7 regarding the Low unemployment rate and incredibly tight Labor market. The increase in wages is likely a staff attraction and retainment effort on the employer's part. ble 15. Re ion 7Wlndustr E to nt Statistics, 2021 NAICS Industry Title Total, All Industries rN u7me qr of Firms 11,481 PNpu mnibe r of L Jobs 172,904 al Data Percent ob 100% $ 9,095,692,755.00 Avg. Annual :gJobs $ 53,248.00 Changein 2,744 i Percent 1.61% i Wage Percent 25.24% Health Care & Social Assistance 1,479 27,973 16.2% $1 585 909 281 $ 56 004.0D 566 -1.98% 17.41% Manufacturing 707 25,026 14.5°% $1 509 296 798 $ 61 100.00 34 0.14% 21.67% Retail Trade 1,282 23,469 13.6°% $809,464,301 $ 34,736.00 72 0.31°% 28.99% Educational Services 230 16,246 9.4% $789,460,760 $ 54,808.00 635 4.07% 23.44% Accommodation & Food Service 758 13,033 7.5°% $237,030,611 $ 18,720.00 1,232 -8.64°% 27.31°% Construction 1,779 14,594 8.4°% $1 102 362 253 $ 77 688.00 2,847 24.24°% 27.46°% Admin. Support & waste Nbmt. Svcs. 536 7,094 4.1°% $274,237,610 $ 39,572.00 26 -0.37°% 25.70°% Wholesale Trade 397 6,975 4.0% $466,428,518 $ 68,224.00 165 2.42°% 27.02°% Transportation &Warehousing 448 6,799 3.9°% $364,787,603 $ 55,796.00 80 1.19°% 28.75°% Public Administration 208 6605 3.8°% $393 681 835 $ 60 164.00 254 4.00°% 19.83°% Other Services 1,342 5,344 3.1°% $168 72D 877 $ 32 032.00 158 3.05°% 29.20°% Finance & Insurance 527 5,075 2.9°% $458,888,962 $ 82,628.00 242 5.01 °% 44.06°% Professional &Technical Service 747 4,044 2.3°% $278,441,371 $ 68,536.00 138 3.53°% 20.21°% Information 144 1,890 1.1°% $122,818,553 $ 65,260.00 240 -11.27°% 23.03°% Utilities 26 1,628 0.9°% $198 759 221 $ 121 680.0D 285 -14.90°% 18.99°% Arts, Entertainment, & Recreation 223 1,823 1.1°% $30,166,335 $ 16,380.00 66 -3.49°% 18.76°% Agriculture, Forestry, Fish & Hunt 213 2,241 1.3°% $96,183,443 $ 41,392.00 406 22.13°% 23.63°% Real Estate, Rental, & Leasing 366 1,237 0.7°% $47,708,212 $ 37,648.00 194 -13.56°% 27.19°% Nana ement Companies 57 1,498 0.9°% $139 814 605 $ 93 808.00 261 21.10% 32.84°% Wing 12 305 0.2%1 $21 531 606 $ 69 992.00 61 25.00% 14.45°% Souce DEED Quarterly Censu3oPEmployment&Wage3(QCEW)&20177WCEDSReport 19 REGIONAL OVERVIEW Distinguishing Industries Region 7W has a high share of employment in Manufacturing, Construction, and Transportation. Specializing in areas of Furniture & Related Product Manufacturing, Fabricated Metal Product Manufacturing, and Food Manufacturing, this industry makes up 11,602 jobs in the region. Another booming industry in the region is Construction and Heavy & Civil Engineering Construction, providing a combined 18,179 jobs to the region and $1.5 billion in total payroll (see Table 16). ble 16. Region Muistinguishing Industries or U-11191-�MOMN MUM 0 ffral.- Total All Industries 0 11 481 172,904 $ 9 095 692 755.00 $ 53 248.00 1 Furniture & Related Product Wnufacturinq 337 65 2,153 $122,358,383 $ 64,012.00 4.0 Heavy & Civil Engineering Construction 237 123 3,585 $420,465,583 $ 130,104.00 2.3 Animal Production &A uaculture 112 102 1,364 $57,781,728 $ 48,360.00 2.0 Fabricated Metal Product Manufacturing 332 176 5,108 $325,522,012 $ 71,604.00 1.9 Utilities 22 26 1,628 $198,759,221 $ 121,680.00 1.9 Motor Vehicle & Parts Dealers 441 210 3,799 $220,310,731 $ 61,724.00 1.8 Truck Transportation 484 282 2,868 $195,498,045 $ 75,452.00 1.8 Construction 23 1,779 14,594 $1,102,362,253 $ 77,688.00 1.7 Agriculture, Forestry, Fishing & Hunting 11 213 2,241 $96,183,443 $ 41,392.00 1.6 Food Kthnufacturing 1 311 591 4,341 1 $249,675,651 $ 63,856.00 1 1.5 Source: DEED Quarterly Census of Employment & Wage (QCEVI� Industry Projections The Central Minnesota planning area is projected to grow 5 percent from 2020 to 2030, a gain of 15,046 new jobs. The largest industry, Health Care & Social Assistance, is expected to grow 11.9 percent or add 5,541 jobs over the next decade. The Accommodation & Food Service industry is expected to increase by 21.6 percent. The Arts, Entertainment, & Recreation industry is projecting an impressive 31.1 percent increase from 2020 to 2030, adding 820 jobs to the region. Trends in development strategies are focused on bringing quality of life amenities to areas as a means to attract residents and employers to the region. Table 17. Central Minnesota Industry Pro'ections 2020-2030 5.0% 15,046 Total All Industries 301 170 316,216 Health Care and Social Assistance 46,672 52,213 11.9% 5,541 Public Administration 19,239 20,198 5.0% 959 Man ufacturing 39,543 40,646 2.8% 1,103 Retail Trade 35,588 33,781 -5.1% (1,807) Self -Employed and Unpaid Family Workers 27,454 26,917 -2.0% 537 Accommodation and Food Services 19,327 23,505 21.6% 4,178 Construction 18,984 19,792 4.3% 808 Other Services 10,108 11,290 11.7% 1,182 Administrative and Waste Services 9,545 10,066 5.5% 521 Wholesale Trade 10,123 10,516 3.9% 393 Transportation and Warehousing 10,098 10,685 5.8% 587 Finance and Insurance 7,796 7,912 1.5% 116 Professional and Technical Services 6,685 7,228 8.1% 543 Arts, Entertainment, and Recreation 2,636 3,456 31.1% 820 Agriculture, Forestry, Fishing & Hunting 5,052 4,493 -11.1% 559 Information 2,639 2,842 7.7% 203 Educational Services 23,734 24,976 5.2%1 1,242 Utilities 1,952 1,686 -13.6% 266 Real Estate and Rental and Leasing 1,754 1,737 -1.0% 17 Management of Comanies and Enterprises 1,877 1,891 0.7% 14 �Mining 364 386 6.0% 22 Source: DEED 2020-2030 Employment Outlook 20 REGION 7W 2022 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGYACR 7 Employers by Size Class In Region 7W, 85.2 percent of businesses are small businesses and employ less than 20 people, according to the U.S. Census Bureau County Business Patterns statistics. This is slightly higher than the state of Minnesota, where small business makes up 84.2 percent of all business. Businesses that employ between 20 and 99 staff make up 12.6 percent of firms in the region. Region 7W has seen a decrease in the number of firms that employ 500 or more people since 2015, dropping from 25 firms to just 13 firms in the region. Nonemployer Establishments Every small business starts somewhere, usually as a self- employed business with no more than a single business owner employee. These businesses are called nonemployer establishments and are the steppingstones to small businesses. Region 7W was home to 30,587 self-employed or nonemployer businesses. The Table 18. Em to ers b Siz ��mm--Region of .. 1-4 NumberNumber 5,967 7W 54.7% Minnesota 53.70% 5-9 1,916 17.6% 17.60% 10-19 1,406 12.9% 12.90% 20-49 1,071 9.8% 9.70% 50-99 1 306 2.8% 3.30% 100-249 171 1.6% 1.90% 250-499 54 0.5% 0.60% 500 or more 13 0.1 % 0.20% Total Firms 10,904 1 100%1 0 Source: U.S. Census Bureau, County Business Patterns Table 19. Nonem to er Statistics, 2019 30,587 $ 1,470,191.00 1,408 4.8% Region 7W Benton 2,634 $ 120,022.00 80 3.1 % Sherburne 6,783 $ 306,667.00 257 3.9% Stearns 11,125 $ 590,166.00 769 7.4% Wright 10,045 $ 453,336.00 302 3.1% Minnesota 418,080 $ 20,377,253.00 20,702 5.2% Source. U.S. Census, Nonemployer Statistics Program region had 1,408 new firms from 2015 to 2019, nearly matching the number of new nonemployer establishments from the previous decade of 2005 to 2015 at 1,485 firms. Stearns County led the region with 769 new nonemployer firms, followed by Wright County with 302, Sherburne County with 257, and Benton County with 80. Census of Agriculture A key industry to Region 7W is agriculture with 5,606 farms boasting a market value of products sold at over $1.2 billion according to the U.S. Department of Agriculture. Leading not only the region, but also the state of Minnesota in market value Table 20. Census of A riculture 2017 Region 7W u mbe r of Farms 5,606 PM ProductsN $ arket Val ue of .. 1,241,259,000 State Rank Change in Market Value, 2012-2017 -3.9% Benton 816 $ 207,177,000 42 24% Sherburne 501 $ 89,597,000 60 1% Stearns 2,951 $ 747,977,000 1 -7% Wright 1,338 $ 196, 508, 000 45 -14% Minnesota r 68,822 $ 18,395,390,000 -14% Source: 2017 Census ofAgriculture of products sold is Stearns County at $747,977,000.00. 21 SIGNIFICANT ENERGY TRANSITIONS ELECTROLUX, SHERCO, MONTICELLO NUCLEAR GENERATING PLANT, SARTELL PAPER MILL Electrolux PLant Closure 9Electrolux R Electrolux At the end of 2019, Stockholm - based Electrolux ceased production at its freezer manufacturing plant in St. Cloud, Minnesota. The 45-acre site was home to a 900,000 square foot plant and as the City's second largest private employer, the Electrolux closure impacted approximately 900 primary jobs. Electrolux invested in its South Carolina plant, moving upright freezer production to that facility. Closure of the freezer production plant resulted in the loss of the state's only remaining appliance manufacturing operation, which existed in the City of St. Cloud since 1947. The loss of 900 jobs at the end of 2019 represented 2.4% of the City's labor force (36,911 workers as of 2017). In addition, an economic impact analysis was recently completed, and it estimated the following additional impacts from the plant closure: • The loss of 900 jobs at the household refrigeration and home freezer manufacturing plant will affect an estimated 1,800 jobs in Stearns, Sherburne, and Benton counties. • The loss of 900 jobs is predicted to cause a decline in economic output of an estimated $670.1 million in the three counties. This includes $102.6 million of lost labor income in the county. • Demographic data indicates some Electrolux workers may face difficulties in career transitions. More than half of the company's workforce is age 50 or older. In addition, 45% of employees have worked at the facility for 20 to 49 years. In response to the Electrolux Plant closure, the City of St. Cloud applied for and was awarded an Economic Recovery Grant from the Economic Development Administration. During the two-year grant term, the City employed an Economic Recovery Grant Coordinator and the following tasks have recently been completed: • Promotion of Local Industry & Workforce Assets - Work with the City and strategic partners to identify resources and facilitate completion of a Target Industry, Innovation and Workforce Skills Analysis. • Business Development - Recognizing that up to 90% of net new job growth comes from existing business in a community, support and encourage the creation and retention of high - quality jobs and new private investment by existing corporations in St. Cloud through an aggressive Business Retention & Expansion (BRE) program. • Reuse and Redevelopment - Assist in negotiations with the City and Electrolux regarding the future reuse and potential redevelopment of the property vacated by the Electrolux freezer manufacturing plant at the end of 2019. • Mitigation of Unemployment Impacts - Assist workforce partners, including St. Cloud State University and St. Cloud Technical & Community College, to assess local employment needs and job skill training opportunities through the collaborative development of a sustainable workforce training program. 22 Sherco Decommissioning: Changing Focus on Electric Power Generation For the current plum CEDS planning period (2023- _ - 2027), one of the most significant economic transitions or impacts for the 7W region will be ongoing decommissioning of the Sherburne County Generating Station, known as Sherco. The Sherco plant is one of the largest coal-fired power plants in the nation, located in Becker, Minnesota (Sherburne County). Its three units have a combined capacity of 2,250 megawatts. In 2016, the Minnesota Public Utilities Commission (PUC) approved shutting down the plant's Unit 2 in 2023 and Unit 1 in 2026. In 2022, the PUC approved Unit 3 for decommissioning in 2030. The Sherco facility employs approximately 300 workers, and of equal significance, the plant represents 75 percent of the tax base in Becker, and 15 percent of Sherburne County's tax base. The original plans called for replacing the coal-fired units with a natural gas -fired power plant, along with renewable energy improvements, and would have resulted in a loss of approximately 200 positions. Xcel's most recent Integrated Resources Plan, approved by the PUC in February 2022, eliminated the natural gas fired plant in Becker from the plan and called for several thousand acres of solar array in Becker Township and Clear Lake Township, which border the City of Becker. This change eliminates an estimated 275 positions. Substantial investments have been made into this area, including a $20.5 million State bonding appropriation that will bring water and wastewater trunk lines into the 1,675 acres of developable land surrounding the power plant. Large industrial sites are certified on 1,460 of SIGNIFICANT ENERGY TRANSITIONS those acres. The City of Becker, Becker Township, Sherburne County, and Xcel Energy have engaged in a master planning effort for the Xcel-owned Land in this area to align development efforts and bring these projects to the implementation stage. Future of MNGP: Successful Transition for Energy Host Communities As Region 7W considers the current planning period for this CEDS (2023- 2027), the future of two energy host communities is a critical issue. The City of Monticello, like the City of Becker, is planning for a future without a major electric utility as the core of its tax base. Xcel Energy operates the Monticello Nuclear Generating Plant (MNGP) along the shores of the Mississippi River in Monticello (Wright County). MNGP has been operational in Monticello since 1970 and currently represents 56% of the city's entire tax base, 9% of Wright County's tax base and 41% of the local school district's tax base. MNGP is the city's largest employer, and it is estimated by a recent economic impact analysis, that its employees contribute over $226,000,000 to the region's GDP and $127,000,000 of disposable income to the local economy. Xcel Energy has submitted its required Integrated Resource Plan to the Public Utilities Commission seeking re-licensure of the Monticello facility through 2040. While Xcel Energy seeks re- licensure of the MNGP facility, Monticello is preparing for a future beyond licensure. 23 The Sartell Paper Mill The original paper mill was constructed in 1905. The C ity's namesake, Joseph B. Sartell, sold 70 acres along the Mississippi River to a group of investors for $1 to bring the mill business into the Sartell community. This was the ideal paper mill Location, which had access to the Mississippi River hydropower, and was adjacent to a BNSF rail line. The mill began making paper in 1907, which was predominantly newspaper and later transitioned to magazine paper. An integral part of the mill operations was the construction of the Sartell Dam, which extends across the Mississippi River. The original dam was constructed of wooden planks, local granite, fieldstone, and concrete. The dam was later rebuilt in 1960, which resulted in the formation of Little Rock Lake. On -site pollution control and wastewater treatment were installed to protect the mighty Mississippi River. The mill became a large employer for women whose husbands and fathers were leading war efforts. The mill was also crucial for residents and employees who used its steam - operated whistle for fire alarms, shift work signals, and lunch breaks. Sartell residents even gauged the wind direction based on the plant's smokestack. The smell of pulp also gave off a distinguishable scent that was often referred to as "smelling like jobs." The mill was sold to Verso Paper in 2006. Throughout all the adaptations the mill underwent, the most important role that the mill served was as an employer to generations of SIGNIFICANT ENERGY TRANSITIONS families within the City of Sartell and surrounding communities. As the world became more digitized, and communication went paperless, it is not surprising that the paper industry dwindled. The paper mill employed nearly 500 people at the height of production. In 2011, two of the three paper machines within the mill were shut down, which Led to 175 people being laid off. Although the massive lay off was detrimental to the local economy, it is not even comparable to the explosion that destroyed the mill complex on May 29, 2012. The explosion killed one worker and injured four others. On August 2, 2012, the mill announced that it would not reopen. The future of the Verso Paper Mill site is unknown at this time and will be dependent on environmental reviews and development interest. This would likely be a multi -year redevelopment of a core property within the City of Sartell that harbors vast amounts of history. In the end, the paper mill site demonstrates how the Sartell community can embody change and adapt to future growth and development for generations to come. The City of Sartell remains open to the potential industrial, commercial, and residential opportunities that this site embodies. 24 ANALYSIS SMAT. ANALYSIS A regional S.W.O.T. Analysis was conducted on July 27, 2022, at a public meeting that was held at Back Shed Brewing in Waite Park, MN in Benton County. The meeting included a brainstorming session amongst multi -industry professionals across Region 7W (see photo below). The intent of this session was to collect the views and ideas of the regions Strengths, Weaknesses, Opportunities, and Threats by the stakeholders in the region. Professionals across many sectors participated in the analysis, including the sectors of, education, workforce, arts and tourism, manufacturing, retail, human capital, natural resources, foundations & non -profits, parks & recreation, broadband, housing, transportation, community services, utility companies, and other entities. Representatives from the four Counties, several local Cities, and Xcel Energy met in June to start planning the event. The Initiative Foundation out of Little Falls was selected to facilitate the session and each representative was tasked with reaching out to the leaders of each of the different industries within their County and City borders. A formal invitation was sent in early July and approximately forty community leaders attended the event. The Professor of Economics, Dean from St. Cloud State University, kicked -off the event with a demographic recap of the region that set the table for the event discussion. The S.W.O.T. Analysis was then conducted against each of the four recommended industry standard cornerstones for strong regions and communities: Human Capital, Economic Competitiveness, Community Resources, and Foundational Assets. As a region we were able to identify and discuss our strengths and opportunities, enabling us to Leverage them against the regions weaknesses and threats to develop a comprehensive economic development strategy that allows us to capitalize on our assets to take advantage of the opportunities, while strengthening our identifiable gaps and minimizing our threats. 25 REGION 7W 2022 COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY -Access to quality, local medical facilities • Transportation infrastructurelstrong highway system • Highly productive farmland • Educational facilities • Perpetually protected green spaces • Parks and trails systems • Regional commitment to broadband investment • Growing renewable energy production • Engageme orce • Proximity to Twin Cities & St. Cloud • Public and private partnerships investing in skills development • Expansion and retention of small businesses while supporting entrepreneurialism • Quality land use development and guidance • Support minority -owned buisnesses • Reuse of major industrial sites • Seek infrastructure funding • Increased utilization of current Rail & Airport assets • Undersupply of quality and affordable housing • Lack of childcare • Low retention of skilled workforce • Underutilized public transportation, and regional airways • Regional marketing efforts -Vulnerability to water contamination -Aging water and sewer infrastructure • Wage competition • Economic shock preparedness • Early retirements and aging population effect on workforce • Potential government overregulation • Energy sufficiency • Lack of investment in housing • Lack of appropriate levels of childcare STRATEGIC DIRECTION & ACTION PLAN MADO and DevelopMN The DevelopMN Plan is the result of a collaborative effort of the ten Economic Development Districts that make up the Minnesota Association of Development Organizations (MADO). MADO was developed to align strategic economic development efforts throughout Greater Minnesota, and leverage resources at all levels for a greater overall development impact. DevelopMN identified four cornerstones for strong regions and communities that are a template for the organization of the Minnesota CEDS: human capital, economic competitiveness, community resources, and foundational assets. Human Capital Developing, retaining, and attracting talent are critical for Region 7W in order to sustain and grow businesses and communities. Tracking the characteristics of the labor force and the needs of employers, and creating strategies for alignment between the two, are the foundation for this cornerstone. Labor Force Context As Region 7W looks to grow its economy, it is confronted with the challenge of meeting the hiring and skills needs of employers. Region 7W has a higher labor force participation rate (72.2%) compared to the state's (69.3%) labor participation rate. Comparatively, the percent of labor force participation is lower since the last CEDS report. Region 7W's labor force will see a significant shift over time, with a steady gain in the number of workers aged 20 to 54 years, against a huge decline in the number of workers aged 55 to 64 years as the Baby Boomers continue to age into retirement. Additionally, Region 7W is experiencing an 8.5 % increase in labor force participation by Black or African American workers and a 7.2% increase in labor force participation for Hispanic or Latino workers since the 2017 CEDS report. It's clear that Region 7W has made significant progress in shrinking the unemployment rate in every minority group. Labor Force Goals • Uphold a high labor force participation rate and maintain a low unemployment rate. • Increased state and federal investment in regional workforce training. • Increase in family -sustaining jobs. • Increase workers with labor market barriers. • Increase in the number of underrepresented entrepreneurs and small business owners using start-up and small business programming. Labor Force Strategies • Embrace diverse populations (e.g., aging, youth, minorities, previously incarcerated, people with disabilities) through targeted workforce programs. • Increase employment access and retention by connecting potential employees to the existing employment and workforce support networks. • Design industry -led certification training programs, credit -based apprenticeships, internships, and on the job training to train existing and future workers for a more competitive economic environment. • Conduct collaborative planning activities with regional partners to promote alignment of economic and workforce development goals, including advocacy emphasizing postsecondary education and skills training to support high -growth, high -wage jobs, including skilled trades. 27 • Pursue funding opportunities with workforce partners to expand the availability of training programs for targeted industries and occupations. • Make labor market information more accessible to school districts and higher education institutions so students can make informed choices about career options. • Develop a mentor program for older workers to enhance their skill set. • Develop a training program for retiring workforce to help develop a "second career." • Develop relationships with childcare providers to learn how as a region we can support their success to provide adequate childcare for workers. • Develop initiatives to attract childcare workers to the region to support the growing workforce demands. Education and Skills Context Region 7W has a greater population of young people aged 18 to 24 years old in comparison to the state of Minnesota. The region's younger population is demonstrating a commitment to higher education with 44.54 percent of people in this age bracket attending some college but not yet having received their degree. Region 7W also experienced an increased percentage of high school graduates aged 25 to 44 as 22.14 percent of this age group has a high school diploma or equivalent. The region and the state of Minnesota have seen the number of individuals with associate's degrees, bachelor's degrees, and advanced degrees increase in the age brackets of 45 to 64 years and 65 years and over. Education and Skills Goals • Increase the number of residents (ages 18- 64) who have completed post -secondary STRATEGIC DIRECTION & ACTION PLAN education or training with a particular focus on certificates, technical degrees, and apprenticeships relevant to employment in middle -skill, living wage occupations. • Increase partnerships with area schools highlighting the construction and trades professions. • Work to eliminate racial/ethnic disparities in educational attainment to give everyone the same opportunities. Education and SkiLLs Strategies • Develop and encourage youth (K-12) and Post -Secondary apprenticeships, internships, mentorship programs. • Support "brain gain" programs to recruit and retain people aged 25-54. • Increase awareness among students, parents, and educators about the educational requirements for future employment opportunities specific to the region. • Market career opportunities in the region and share information about in -demand careers with students, parents, and educators. • Align education and workforce data to meet current and future skill needs of employers. • Support education programs for employers to consider underserved and diverse populations. • Establish and expand entrepreneurship education programs in K-12 schools. • Expand access to post -secondary education opportunities in the region by establishing secondary education satellite facilities available for use by area universities and community colleges. Economic Competitiveness Making Central Minnesota an attractive environment for growth is critical to creating jobs, improving living standards and financing necessary public services. Economic 28 Competitiveness requires communities to develop and link all available assets to support innovation and encourage business growth. Business Growth Context Many businesses in Region 7W are small businesses, with 78% of businesses reporting Less than 20 employees in 2019, according to County Business Patterns from the U.S. Census Bureau. The number of large businesses in Region 7W has decreased slightly, from 25 to 20 employers reporting more than 500 employees (the Small Business Administration's official cut off for a "small business") in 2019. It remains true that small businesses are vital to the region's economy. Business Growth Goals • Increase the number of new businesses. • Increase the number of jobs. • Increase the number of industry sectors in the region. Business Growth Strategies • Assist business start-ups and existing businesses in finding the services and support they require to create, attract, and retain jobs. • Coordinate public -private partnerships to facilitate small and medium sized business lending. • Educate businesses on different grant and funding opportunities available. • Advocate to fully fund regional Small Business Development Centers at the state Level. • Develop and promote a regional marketing strategy with a clear and concise message to attract workforce and new businesses. • Support start-up and small businesses with training, market research, financial STRATEGIC DIRECTION & ACTION PLAN assistance, strategic planning, and other assistance. • Promote business succession planning resources and processes throughout the county and cities. • Campaign for competitively -priced high- speed broadband infrastructure throughout the region to attract and retain businesses. • Coordinate public -private partnerships to facilitate ongoing community business retention and expansion programs. • Create and foster networks of incubator, co - working, proof of concept and maker spaces. • Encourage and support immigrant business startups and expansions with connections to resources, financing, and technical assistance. • Strengthen the region's resilience and competitiveness by assessing and leveraging industry clusters. Entrepreneurship Context Central Minnesota communities must embrace and encourage innovation, calculated risk -taking and foster entrepreneurship to compete effectively in the global economy. Self-starters, creative thinkers, and service -oriented entrepreneurs are a necessary part of the region's work force. Entrepreneurship Goals • Increase cross -sector initiatives to support entrepreneurship and innovation. • Increase BR&E efforts to learn what is impeding new business opportunities. Entrepreneurship Strategies • Identify, create, and promote programs, activities, and policies fostering innovation and for entrepreneurship (e.g., ILT Academy, gBETA, Launch MN, Enterprise Academy). 29 • Identify and grow angel and venture capital investments. • Develop a local business mentorship program. • Work with immigrant entrepreneurs to connect them to existing local resources. • Educate entrepreneurs on different grant and funding opportunities available. • Expand K-12 availability to business startup courses to support entrepreneurship (e.g., DECA, Junior Achievement, Central Minnesota Creating Entrepreneurial Opportunities (CEO) program). Community Resources Central Minnesota communities seek to maintain rural values, their heritage and the assets that support them. Community Resources include topics that balance the preservation and improvement of local social, cultural, and natural assets that are critical for the future. Arts and Culture Context Minnesota's artists and creative workers have a Large and growing impact on our state's economy. Both through direct spending and through founding and running creative businesses, they are a core part of the economic vitality of our state. The 2015 Creative Minnesota report illustrates that artistic spending by Minnesota's 104,148 full-time and part time artists and creative workers has a far- reaching impact. Cultural and artistic opportunities attract residents, visitors and increase tourism and tax collection revenue. Arts and Culture GoaLs • Increase cultural amenities for the purpose of attracting economic investment and skilled workers to the region. • Increase availability to environments in which the arts and arts education thrive and STRATEGIC DIRECTION & ACTION PLAN contribute to more vibrant and creative communities. • Increase participation in welcoming community's programs. Arts and Culture Strategies • Communicate economic development impacts of arts with local leaders. • Connect artists to SBDC, SCORE and other financing opportunities. • Connect artists with resources their need to make a living and improve the quality of life. • Integrate the arts in public infrastructure and space. • Improve education in the school system on career opportunities in the arts. • Engage an artist's voice in community planning; get them involved at the ground Level. • Create economic or job clusters based on creative businesses, including linking those businesses with non -cultural businesses. • Use celebrations or festivals to highlight a community's cultural amenities. • Utilize arts -based placemaking to improve downtowns and public spaces and to enhance the vibrancy of our communities. Tourism Context Tourism is a source of economic vitality to the state of Minnesota. Tourism can represent an economic development alternative for communities in addition to other industries. Increasing the economic benefits from tourism can represent an important part of a community's economic development strategy. Tourism Goals • Increase the local tax base by attracting and serving visitors as a means of bringing money into the community, generating personal income, jobs, and tax revenue by 30 marketing, and ensuring Central Minnesota as a destination. • Increase the proportion of overnight visitors and the number of same day visitors. • Attract people from outside the region to increase visitor spending and increase consumer awareness of the area. • Increased information -sharing across regional marketing efforts documented in partner processes. Tourism Strategies • Promote local community events, amenities, and assets outside of geographic region to import dollars into the region. • Develop and ensure consistent regional branding efforts that promote local businesses and locally made products. • Capitalize on the region's strong collaborative relationships with multi - jurisdictions, non-profit sectors, and philanthropists to strengthen outdoor attractions such as parks, trail connectivity, park programming, tourist attractions and marketing the region. • Develop new and support existing visitor infrastructure. • Strategically invest in tourism infrastructure and projects that support economic competitiveness and quality of life of the region's communities. • Collaborate with municipal, economic development professionals and community Leaders to focus on tourism growth. • Develop the tourism workforce by facilitating access to existing training and development opportunities. • Develop career paths in the tourism industry to attract and keep employees of all ages while staying competitive in pay and benefits to attract and retain employees. STRATEGIC DIRECTION & ACTION PLAN Natural Resources Context Central Minnesota has an abundance of natural resources, including numerous lakes, streams, wetlands and rivers and diverse landscapes and habitats ranging from gardens and urban parks to prairies and forests. Natural resources provide critical habitat for wildlife, protect water quality, offer recreational opportunities, and serve as the foundation for the region's environmental well- being, economic prosperity, and quality of life. Protecting these important recreational, aesthetic, and ecological resources is a priority for the region and its residents and partners. However, the county's natural resources are under increasing pressure from population growth, development, and climate change. Natural Resources Goals • Increase access resources that focus on responsible management of natural resources, development of effective partnerships and promotion of environmental stewardship. • Increase investment in redevelopment projects (brownfields, etc.). • Increase composting, recycling, reduction, and reuse of solid waste as an alternative to Land filling. • Increase the use of solar energy and other renewable energy resources in existing and new developments in the region. Natural Resources Strategies • Encourage community and regional planning that address all aspects of natural resource protection, preservation, and restoration. • Develop and manage funding programs that provide financial and technical assistance to partners to implement best management 31 practices and programs that preserve, enhance, and restore natural resources. • Protect the region's natural resources through public outreach and education. • Preserve and protect natural areas and open spaces to maintain and attract desired wildlife species and provide "non -developed green space" for community residents. • Encourage development to conserve natural amenities such as streams, wooded areas, open space, greenbelts, aquifers, and incorporate these natural features into the development plan as open spaces, buffer areas or other common areas. • Support policies and procedures to mitigate invasive species threats and focus efforts on their reduction or elimination. • Maintain existing park facilities, while seeking opportunities to expand and enhance future facilities. • Protect wetlands from direct and indirect impacts of new and existing development and infrastructure. • Seek sources of public and private funding for brownfield site assessment, cleanup, and redevelopment. • Promote educational programs on energy conservation and use of renewable energy resources. • Support the development of diverse, reliable, and cost-effective energy sources and systems to meet the region's economic and environmental goals. • Work with stakeholders to reduce impacts associated with air quality and continue to participate in regional planning efforts that improve air quality to protect human and environmental health. STRATEGIC DIRECTION & ACTION PLAN Foundational Assets Central Minnesota communities require proactive and collaborative approaches/strategies to address infrastructure needs in a cost-effective manner. Managing the access to, maintenance, replacement, and growth of these assets is key to preserving and maintaining communities and providing for growth opportunities. Broadband Context Affordable high-speed internet is necessary to remain competitive in today's global economy. Many businesses and residents experience lack of access to reliable broadband at acceptable speeds and costs. Broadband Goals • Increase the number of households served by affordable internet. • Increase digital accessibility to electronic resources. • Expand broadband to unserved and underserved parts of the region. • Ensure equity of access for all students outside of school. Broadband Strategies • Advocate for broadband funding at both state and federal levels. • Utilize state resources and programs to increase broadband access. • Utilize ARPA and other federal funds to encourage internet providers to expand service areas within the region. • Promote an understanding of the importance of broadband to a community's infrastructure. • Develop "Dig Once" programs in communities. • Partner with broadband providers to explore ways to assist with broadband infrastructure. 32 • Identify industries in need of high-speed internet connectivity in the next five years to plan infrastructure development. • Work with the private sector to promote the availability of high-speed broadband (employers, realtors, chambers). Transportation Context A robust and efficient transportation system and reliable transit service throughout the entire region will be increasingly important for access to goods, services, and employment. Transportation Goals • Decrease in the number of severe injuries and fatalities on roadways. • Increase in milage in the number of designated infrastructures for walking and biking. • Increase the utilization of the regional airport. • Increase in the utilization of the Northstar Rail. Transportation Strategies • Support regional transportation infrastructure to promote multi -modal systems, improvements to outdated components and enhanced connectivity among the growth centers in the region. • Encourage state and local units of government to support and pursue options that increase the availability of transportation funding. • Work to ensure that long-range public transit policy decisions in Central Minnesota address future demographic shifts and needs. • Prioritize transportation projects that connect regional economic hubs. • Design streets and highways that are safe and efficient to move vehicular traffic, and accommodate transit, pedestrians and STRATEGIC DIRECTION & ACTION PLAN bicyclists while minimizing environmental impact. • Promote a mobility management public transportation system where all providers of public transportation work together to maximize efficiency and resources. • Maintain the region's transportation infrastructure and preserve transportation corridors. • Maintain and reconstruct existing roadways and bridges in a manner that promotes safety, increases efficiency, and minimizes Lifetime costs. • Ensure safe and efficient bridges. • Develop and expand transportation facilities to accommodate freight movement and meet the changing needs of the regional economy. • Retain and preserve facilities for air transportation. • Preserve rail corridors and provide safe and convenient rail facilities and service to meet rail passenger and freight transportation needs for the region. • Support Northstar Commuter Rail Corridor operations by identifying the needs for the region. • Work with state and local partners to coordinate efforts to develop and enhance regional bicycle and pedestrian systems. Housing Context Housing needs and issues in Central Minnesota vary from community to community. The need to provide a variety of housing types varies significantly per community. Identifying where and how to prioritize limited resources to address housing is important to meet the needs of all residents. 33 Housing Goals • Increase housing options that give people in all life stages and of all economic means viable choices for safe, stable, and affordable homes. • Increase housing affordability. • Conduct a regional housing study to provide data to local developers. Housing Strategies • Advocate for funding programs for demolition of vacant, unsafe, and dilapidated housing units. • Rehabilitate and preserve the existing housing stock while prioritizing poverty- stricken neighborhoods and disinvested areas. • Establish partnerships with private sector, nonprofit, other government agencies and neighborhood groups to access available public funding and attract private capital for affordable housing development. • Work with local organizations to provide financial planning for homeownership. • Advocate for housing study funds. • Encourage development of special housing for the elderly, persons with disabilities, and workforce. • Facilitate regional conversation and support to address housing needs. • Integrate economic development and job creation with workforce housing development, including housing within walking distance of job growth locations. • Establish a Local Housing Trust Fund to help support critical housing needs in the region. • Improve housing diversity and access across the region and direct development to areas with existing infrastructure. STRATEGIC DIRECTION & ACTION PLAN Water Quality Water -related Infrastructure Context The region's water resources are under pressure from a host of issues, such as growing populations, agricultural and commercial production, recreational demands, and climatic shifts. These issues stress water resource quality, calling into question the resiliency of these resources. In addition, the financial cost of addressing aging water -related infrastructure is overwhelming cities and residents. Needed upgrades for replacing water, wastewater and storm sewer facilities can be a significant burden. Local units of government need to be innovative in paying for and addressing on -going infrastructure maintenance. Water Quality and Water -related Infrastructure Goals • Reduce the number of impaired waters and endangered ecosystems. • Increase availability of technical assistance and educational resources to residents, municipalities, watershed management groups, and other county departments to protect and restore our water resources. Water Quali"astewater Infrastructure Strategies • Utilize strategies and implementation actions called for in completed comprehensive watershed management plans. • Work with partners to implement water quality projects to protect and/or restore water resources. • Provide communities with a sufficient supply of safe drinking water, meeting all regulatory requirements, in a cost-efficient manner. • Encourage local governments to obtain technical assistance in early stages of development for infrastructure. 34 • Encourage local governments to develop capital improvement plans that are aligned with comprehensive plans and zoning/land use ordinances. • Support the designing and building sustainable infrastructure to collect and manage stormwater runoff from streets, sidewalks, parking lots and rooftops to prevent stormwater runoff from entering sewer systems. • Promote stormwater management techniques that minimize surface water runoff in public and private developments. • Advocate for the cleanup of contaminated sites with the potential to significantly impact water resources. • Develop funding sources for major improvements to residential and industrial wastewater facilities. • Support efforts to obtain federal, state, and regional funding to upgrade and maintain aging infrastructure (water, sewer, stormwater, drainage facilities) while supporting the expansion of infrastructure to underserved areas. • Encourage regionalization to reduce operation and maintenance costs. • Work with communities to apply for grants that support water quality. • Assist communities to review rate structures for water and sewer services. • Support inter -governmental studies and/or demonstration projects to identify areas for improved water and sewer system efficiency and performance. STRATEGIC DIRECTION & ACTION PLAN 35 ECONOMIC RESILIENCE ECONOMIC RESILIENCE Economic resilience is a key element of a regional economic development strategy to bolster the Long- term economic durability of the region. Economic resilience is a cornerstone pillar on its own and has also been identified by the Federal E.D.A. as an important enough element that economic resilience strategies should be incorporated into the process for carrying out the work identified in all four cornerstones. Human Capital Counties within the region are continually tracking statewide broadband access records. Some counties annually employ a demographer to track recent demographic, business, and income trends, and utilize IMPLAN to ensure county sponsored projects are bringing a positive economic impact to the region. As we see workforce and education patterns diversify into hybrid and remote options, it is imperative the region remains focused on providing adequate and equitable broadband access throughout the region to support the region's workforce, and education attainment. Region 7W intends to work on a more cohesively planned effort to develop a disaster recovery plan, including a communication chain that would streamline regional efforts in the event of an emergency. This plan should include the identification of each county's key resources, the establishment of a communication process not only across the region, but with businesses to ensure their needs are met in the event of a disaster, and the development of a coordinated impact assessment plan. Economic Competitiveness Sherburne County is in the process of developing a countywide Comprehensive Land Use Plan (CLUP) that will guide the County's future direction and priorities for growth and land use regulations. The CLUP will encourage development in appropriate areas, while preserving agricultural and urban interests, protect and preserve the County's natural resources for the benefit of County residents and the natural ecology, and support Sherburne County's efforts to retain, expand, and attract new business to the County, increasing economic competitiveness. In a similar way, Stearns County has adopted a Comprehensive Plan that covers land use, parks, and future growth. Stearns County, in conjunction with Stearns County HRA, have been working on increasing their economic development strategies, including a housing trust for low-income residents. The Wright County Economic Development Partnership, in collaboration with the Wright County and City EDAs are also working to encourage economic development by executing a robust business development, retention, and expansion program, workforce development and county wide marketing initiatives, and economic development capacity building. In addition to land use planning, there are several opportunity zones identified by the federal government across the region which presents an incentive for investors to invest their capital gains in development/redevelopment in these identified zones to spur economic growth. Additional opportunities in the region for growing and diversifying tax bases include the planning and development of a new 39- acre industrial park in the City of Foley, the redevelopment of the former papermill site in Sartell as potential industrial, commercial, and/or residential opportunities, and the collaborative work between Sherburne County, the City of Becker, and Xcel Energy with the energy transition presented by the 36 ECONOMIC RESILIENCE decommissioning of the Sherco Coal Plant in Becker which remains Sherburne's primary focus. The energy transition taking place in Becker presents an opportunity to diversify energy sources to ensure continuity in energy reliability and stability, while serving as a resiliency strategy to minimize any economic shock from energy supply insufficiency. County land use plans and other strategic initiatives will include the consideration of completed housing studies to ensure adequate supply of land available to meet future housing needs in appropriate and desired areas, in addition to consideration of solar density throughout the region as we experience energy transitions. Community Resources Region 7W is emphasizing the opportunity to grow electric vehicle charging infrastructure by facilitating the usage of grant dollars to install electric vehicle charging stations for public use along major transportation corridors throughout the region. In addition to expanding access to green energy and supporting tourism infrastructure, the region is focusing on connectivity in trails and parks to enhance quality of life for all residents and tourists. Foundational Assets Improved utilization of the St. Cloud Regional Airport was identified as a transportation strategy in the action plan along with a desire to better utilize this airport by increasing cargo and passenger transportation to the region. There is a partnership that formed and will remain ongoing between Benton, Stearns, and Sherburne Counties working with the City of St. Cloud to optimize the usage of the St. Cloud Regional Airport. This airport has the unique capability to serve commercial airlines, along with private aircrafts. In addition, within the region there are several partners that are working towards transportation solutions to alleviate traffic congestion that is occurring between Monticello and Big Lake. Not only is this planning project intended to support economic development, once completed it will also serve to execute emergency and disaster recovery in the most efficient way possible. Lastly, Wright County has allocated 4 million dollars of American Rescue Plan funds to support city water/sewer infrastructure projects from full replacement of watermain and sanitary sewer to wastewater facility and stormwater improvements. All these projects, both completed and future planned initiatives, are a testament to the commitment and vision of community leaders with their foresight to study, plan for, and provide a healthy environment for economic prosperity across the region. When looking to the future of Region 7W, economic development leaders across the region plan to pay focus to the continuation of expanding broadband access across the region and the improvements of other infrastructure. Garnering support from Counties, Cities, and Townships and leveraging state and federal broadband grants and provider funds have been vital to the expansion of this infrastructure to support economic growth, stability, and future viability of the region. Continuing these partnerships to 37 ECONOMIC RESILIENCE ensure our businesses, residents, unserved, and underserved populations gain access to fiber is essential to economic growth. Furthermore, leaders plan to work together to continually address transportation solutions to support the growing region, and to solve issues such as providing adequate affordable housing stock, mental health services, and community policing. Goals such as active redevelopment of distressed properties, creating workforce pipelines, establishing a quality workforce through specialized skills training, preserving our natural resources, and continuing to diversify our energy sources and grow and diversify our tax bases remain regional priorities. 38 MPLEMENTATION IMPLEMENTATION & EVALUATION To evaluate the progress of the CEDS, stakeholders in the region will need to regularly meet to assess the goals and objectives that have been developed. As the Economic Development Administration CEDS guidelines indicate, performance measures are an important tool that will allow the region to measure progress in implementing the CEDS and the impact on the regional economy over time. The primary purpose of our CEDS is to align public and private entities around a common vision for Region 7W. Implementation Strategies and Communication Plan As the framework that guides collective strategic efforts and initiatives to foster continued economic development in the region, it is paramount to pursue the goals and strategies of the plan in the months and years following adoption. Consistent and frequent communication and distribution of the strategy plan is necessary to ensure that all jurisdictions within 7W continue work towards the goals of the plan. The Steering Committee will ensure the plan is distributed to all entities as well as ensuring the plan is published on each county's website. Communication should also entail elected officials and leaders from the impacted sectors throughout the 7W region. As implementation of specific strategies are multi -faceted and in nearly all cases involve interagency participation, relationships with district, state, and national entities are a must. This includes MN DEED, MN DOT, public and private secondary institutions, local governments, transportation providers, impactful nonprofit organizations, utility providers, and law enforcement entities. The first step will be looking at developing working groups and/or committees to focus specifically on goals and strategies outlined in the CEDS. Additionally, two immediate committees that would be formed include a marketing committee to focus on regional marketing efforts as well as a committee to continue focus on the creation of an Economic Development District. Such a district would help galvanize stakeholders in the region amongst common interests and the goals and strategies in the plan. It would increase access and opportunities to funding resources, particularly at the federal level, that would further advance the goals of the plan. Furthermore, consistent meetings with local elected officials are necessary to ensure the goals of the plan remain a priority for stakeholders throughout Region 7W. As much of the implementation can be achieved through financial resources, it is important to continue to fund efforts that are aimed at achieving these goals. This includes local funding of programs that continue to promote the economic growth of the region. Locally and regionally, jurisdictions should continue to pursue external sources of funding that align with the goals. Evaluation Framework and Performance Measures Region 7W will conduct an annual review to compare outcomes to the various goals set throughout this document. We will use this review process to celebrate successes and look for solutions to additional challenges that have been presented. This process will not only hold Region 7W accountable for the goals set forth but guide us as we prepare for the next CEDS in 2027. M )LEMENTATION & EVALUATION or _1000000mr-­ The following criteria may be used to measure performance and effectiveness of the CEDS: • Monitor the number of projects, activities, and initiatives identified that are implemented. • Monitor the number of funding applications developed and/or approved and total public and private funds invested. • Increase in number of roadway projects to "right -size" overbuilt highway infrastructure. • Increase in the housing affordability and housing supply to meet regional demands. • Increase in the number of in communities meeting water quality standards and capacity needs. • Increase in efficiency of regional freight transportation due to enhancement and continual maintenance of the regional highway system. • Increase in communities/people/organizations served by affordable high-speed internet. • Reduction in the childcare availability gap. • Increase in mileage number of designated infrastructures for walking and biking (i.e., on -street bike Lanes, safety shoulders, sidewalks/side paths, trails), especially in socioeconomically distressed communities. 40 COMMENT The required public comment period occurred from November 1, 2022, to November 30, 2022. Documentation of public comments are on file and available upon request. Benton, Sherburne, Stearns, and Wright County provided a link to the Region 7W Comprehensive Economic Development Strategy (CEDS) plan on their websites at: Benton County: https://www.co.benton.mn.us Sherburne County: https://www.co.sherburne.mn.us Stearns County: https://www.stearnscountymn.gov Wright County: https://www.co.wright.mn.us The CEDS remained visible for the duration of the 30-day public comment period. Notification of the public comment was given on all county websites and social media outlets. Paper copies and electronic copies of the EDR 7W CEDS plan were also available at all Benton, Sherburne, Stearns, and Wright County's office and by mail, when requested. EDA Agenda: 11/09/22 9. Economic Development Director's Report (JT) A. Block 52 Redevelopment Update: Demolition activities have been completed and significant amount of site excavation work has been done for the building footprint as it relates to allowing work to begin on the underground parking garage. Footings and foundation work has been completed outlining the building footprint. Delays in obtaining the garage wall and ceiling panels means garage assembly activities will not start until the end of November. B. Wiha Tools Expansion New Warehouse -Assembly Facility 73,500 sq. ft. — Development plan sets have been submitted to City staff for review. The Planning Commission reviewed and approved the preliminary and final plat Wahab Addition, in the Industrial Business Campus (IBC) District for the development proposal at the November 1, 2022, meeting. The MIF loan ($220,000 forgivable loan) Agreement (drafted by MN -DEED) was recently approved by the City Council and is in process of being signed by all parties. C. MN -DEED Growth Fund Launched: See attached information from MN -DEED website regarding a new funding program aimed at supporting technologically innovating seed and early -stage businesses. A total of $97 million was awarded to Minnesota for small business financing support. D. Prospect List Update: Please see the updated Prospect List as Exhibit B From: To: Subject Date: Attachments: In Tuday, November 1, 202212:SIT 14 PM aael)OLurn Carla Vita I Director Energy Transition Department of Employment and Economic Development State of Minnesota rat National Bank Building, 332 Minnesota Street, Suite E200 St Paul MN 55101 Cell: 651-SD2-2238 Nle4 I Twiner I lambook o From: DEED Communications <MNDEED@public.govdelivery.com> Sent: Tuesday, November 1, 202212:55 PM To: Vita, Carla K (DEED) <carla.vita@state.mmus> Subject: DEED launches Growth Loan Fund to provide funding for early stage businesses 0 DEED Launches Growth Loan Fund to provide funding for early -stage businesses The Minnesota Department of Employment and Economic Development (DEED) launched the Growth I Can Fund today as part of the recently announced $97 million through the State Small Business Credit Initiative (SSBCI). This program provides direct loans from DEED to technologically innovative seed- and early stage businesses. The federal government has approved Minnesota for up to $97 million in small business financing support, which allows DEED to carry out its commitment to help small businesses grow and succeed. The Growth Loan Fund supports entrepreneurial growth throughout Minnesota. DEED is now accepting applications from businesses seeking financing from the program. Informational webinar Businesses interested in participating in the Growth Loan Fund Program are invited to join a webinar with DEED officials on Friday, November 4 at 1:00 p.m. Applicants must be seeking equity investments in a funding round that includes at least one venture capital fund or accredited investor. Loans range from $100,000 to $400,000 based on 20% of the total investment in the defined funding round, not to exceed 12 months subsequent to loan approval. The business must complete at least 70% of the proposed equity raise to remain eligible for the loan. Eligible businesses must meet one of the following criteria: 1) been certified to participate in the Angel Tax Credit (ATC) Program; 2) be identified by a venture or angel fund for investment; or 3) be identified by an individual accredited investor for investment. To qualify for funding through the Growth Loan Fund, businesses need to be engaged in, or be committed to engage in, technological innovation in Minnesota. The primary business activity must include one or more of the following: Using proprietary technology to add value to a product, process or service in a qualified high-technology field; • Researching or developing a proprietary product, process, or service in a qualified high-technology field; • Researching, developing, or producing a new proprietary technology for use in the fields of: agriculture, tourism, forestry, mining, manufacturing, or transportation; or • Researching or developing a proprietary product, process or service in the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation (no technology component required). More SSBCI programs coming throughout the fall The other small business funding streams launching in the weeks ahead include automation loans and purchase loan participations. Additionally, a partnership with the University of Minnesota will provide opportunities for direct investment venture capital and venture capital fund investments. Bringing it all together: a new online Small Business Hub To help small businesses and startups navigate these new programs and understand the breadth of DEED's existing resources for small businesses, the agency recently launched a new online Small Business Hub. The Hub is designed to help entrepreneurs navigate agency resources to start and grow their businesses. It provides resources and expertise for small business owners looking to launch in Minnesota, along with a comprehensive list of DEED program offerings to help entrepreneurs thrive. It can be found at joinusmn.com/small business. The creation of one -stop shop resources was one of the recommendations of the Governor's Council on Economic Expansion, which advocated for increased focus from the agency to help small business growth. That recommendation will remain a key priority of the Walz-Flanagan administration across the enterprise. For more information about SSBCI, visit Treasury's SSCBI page or learn more at DEED. Questions? Contact Us I N] SUBSCRIBER SERVICES: Manage Preferences I Unsubscribe I Help DEED is an equal opportunity employer and program provider. This email was sent to carla.vitalcDstate.mn.us using GovDelivery Communications Cloud on behalf of: ❑ Minnesota Department of Employment and Economic Development • 332 Minnesota Street Suite E-200 • Saint Paul, MN 55101 - (800) 657-3858 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