City Council Resolution 2022-90CITY OF MONTICELLO, MINNESOTA
RESOLUTION NO. 2022-90
RESOLUTION APPROVING BUSINESS SUBSIDY AGREEMENT CONTAINED WITHIN
A PURCHASE AND DEVELOPMENT CONTRACT BETWEEN THE CITY OF
MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY AND DEEPHAVEN
DEVELOPMENT LLC
BE IT RESOLVED by the City Council ("Council") of the City of Monticello, Minnesota
("City") as follows:
Section 1. Recitals.
1.01. The City has approved the creation of Tax Increment Financing District No. 1-45
(the "TIF District") within the Central Monticello Redevelopment Project (the "Project"), pursuant
to Minnesota Statutes, Sections 469.174 to 469.1794, as amended.
1.02. To facilitate development of certain property in the TIF District (the
"Redevelopment Property"), the City of Monticello Economic Development Authority (the
"Authority") has approved a Purchase and Development Contract (the "Agreement") between the
Authority and Deephaven Development 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 Redeveloper, certain property described in Exhibit A attached hereto
(the "Redevelopment Property") in order for the Redeveloper to construct an mixed-use five -story
building located on the Redevelopment Property that will include approximately 87 rental housing
units and 27,342 square feet of commercial retail and office space, with approximately 83 lower -
level parking spaces and 114 adjacent off-street parking stalls (the "Minimum Improvements").
1.03. In addition, pursuant to the Agreement the Authority will (i) convey to the
Developer, certain property in the City (the "Redevelopment Property") Developer at the price of
$1,484,100 which will be paid from cash in the amount of $1.00 a land write down from the
Authority in the amount of $132,482 (the "Land Write Down"), and a Purchase Price Note (the
"Purchase Price Note") from the Redeveloper in the amount of $1,351,617.00 which will be repaid
from available tax increment generated by the Redevelopment Property in accordance with the
Agreement; (ii) reimburse the Developer for certain public redevelopment costs in the amount not
to exceed $2,867,954 through the issuance of a pay as you go tax increment financing note (the
"TIF Note") and in an amount not to exceed $367,400 through the issuance of a grant (the
"Authority Grant"), subject to the terms and conditions set forth in the Agreement; and (iii)
reimburse the Developer for a portion of the demolition and hazardous materials removal work
on the Redevelopment Property in an amount not to exceed $517,500 (the "DEED Grant")
pursuant to a Redevelopment Grant Contract Agreement Number RDGP-22-0009-o-FY22,
effective as of April 1, 2022, between the Authority and the State of Minnesota, acting through
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the Department of Employment and Economic Development, Business and Community
Development.
1.04. The proposed tax increment assistance to be provided to the Redeveloper requires
that the Council of the City and the Board of Commissioners of the Authority adopt a modification
to the TIF Plan (the "TIF Plan Modification") to update the budget.
1.05. The Purchase Price Note, the TIF Note, the Land Write Down, the Authority Grant
and the DEED Grant to the Developer in accordance with the terms of the Agreement constitute a
"business subsidy" exceeding $150,000 within the meaning of Minnesota Statutes, Section
116J.993 to 116J.995, as amended (the "Business Subsidy Act").
1.06. The "business subsidy agreement" as required under the Business Subsidy Act is
included as one section of the Agreement, and on August 10, 2022, the Authority conducted a duly
noticed public hearing regarding the business subsidy agreement, at which all interested persons
were given an opportunity to be heard.
1.07. The City finds and determines that the business subsidy to the Developer is for a
public purpose and is in the public interest because it will further the objectives of the Project,
redevelop land in the City's downtown which is underutilized or characterized by blight,
increase the tax base of the City and the State, increase jobs in the City and State (including
construction jobs), and help provide a range of housing options in the City.
Section 2. Business Subsidy Approved; Further Proceedings.
2.01. Contingent upon the approval by the Board of Commissioners of the Authority
and the Council of the City of the Modification, the Council approves the business subsidy
agreement contained within the Agreement, subject to modifications that do not alter the
substance of the transaction and that are approved by the President and Executive Director of the
Authority, provided that execution of the documents by those officials shall be conclusive evidence
of their approval.
Approved by the City Council of the City of Monticello, Minnesota this 22nd day of August,
2022.
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