HRA Agenda 08-16-2005
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AGENDA
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Tuesday, August 16,2005 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners:
Chair Darrin Lahr, Vice Chair Dan Frie, Steve Andrews, Brad Barger, and Bill
Fair.
Council Liaison:
Wayne Mayer.
Staff: Rick Wol fsteller, Ollie Koropchak, and Angela Schumann.
I. Call to Order.
2. Consideration to approve the ./une 27,2005 HRA minutes and the July 18,2005 HRA minutes.
3. Consideration of adding or removing items from the agenda.
4. Consideration to approve a resolution adopting a 1110dification to the Redevelopment Plan fix
Central Monticello Redevelopment Project No.1 and establishing TIF District No. 1-36 therein
and adopting a TIF Plan therefor. Applicant: Rocky Mountain Group, LLC.
5.
Public Hearing on the Business Subsidy Agreement and Public I Icaring on the Sale of Land.
Consideration to adopt a resolution approving Purchase and Redevelopment Contract between the
HRA and Rocky Mountain Group, LLC.
6. Consideration to discuss first dral1: of the Contract for Private Redevelopment between the lIRA
and Master's Fil1h Avenue.
7. Consideration to discuss a request for redevelopment assistance 11;)1' purchase and demol ition of a
garage located within TIF District 1-22.
8. Consideration to adopt a resolution authorizing execution of a Tax Increment Pledgc Agreemcnt
with the City of Monticello relating to $25,] 50,000 G. O. Bonds, Series 2005A.
9. Consideration to discuss a request for renovation/renewal assistance for improvcments to a
commercial building located within TIF District No.I-6 (Raindanee Properties.)
10. Consideration to authorize payment of I IRA bills.
II. Consideration of HRA Executive Report.
12.
Comm ittee Reports:
Marketing
Fiber Optics
13.
Other Business:
Next HRA meeting - Wednesday, September 7, 2005
14. Adjournment.
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, .July 18,2005 - 6:00 p.m.
505 Walnut Street - Bridge Room
Commissioners Present:
Vice Chair Dan Frie, Brad Barger, and Bill Fair.
Commissioners Absent:
Chair Darrin Lahr and Steve Andrews.
Council Liaison Present:
Wayne Mayer.
Staff Present: Rick Wolfsteller and Ollie Koropehak.
Guests: Luke Dahlheimer, Dahlheimer Distributing, and Brad Johnson, Lotus Realty Services.
1. Call to Order.
Vice Chair Frie called the special HRA meeting to order at 6:00 p.m.
2.
A. Consideration to approve entering into a Preliminary Development Agreement between the
BRA and Rocky Mountain GrouP. LLC.
Luke Dahlheimer, Dahlheimer Distributing Company, attended the BRA meeting and confirmed
the company's plan to re-Iocate to the Monticello Business Center. They are proposing to
construct a 54,000 sq ft office/distribution center and purchase 8.64 acres of land. Five acres
of the 8.64 acres qualify for the $.95 per sq ft price and the remaining 3.64 acres will be at
market price of$2.15 per sq. ft. plus trunk fees for 3.64 acres. The company currently
employs 28 full-time permanent people at average wage-levels of $20.21 per hour (base)
without benefits. Within two years, plan to hire at least an additional three people bringing the
average wage level to $19.90 per hour without benefits.
The developer has submitted the $10,000 non-refundable deposit and WSB was authorized to
begin survey work for preparation of the plat. Nelson Builders of Buflalo are the general
contractors.
BRAD BARGER MADE A MOTION TO APPROVE ENTERING INTO THE
PRELIMINARY DEVELOPMENT AGREEMENT BETWEEN THE HRA AND ROCKY
MOUNTAIN GROUP, LLC. BILL FAIR SECONDED THE MOTION AND WITH NO
FURTHER DISCUSSION, THE MOTION CARRIED.
B. Consideration to adopt a resolution requestin~ the citv council call for a public hearing date
on the proposed modification to the Redevelopment Plan for Central Monticello
Redevelopment Proiect NO.1 and the proposed establishment of TIF District No. 1-36.
Given the previous action, Ehlers and Kennedy & Graven will begin preparation of the TIF
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HRA Special Meeting Minutes - 07/18/05
District Plan for TIF District No. 1-36, an economic district, and the Purchase and Contract for
Development. In lieu of keeping the project on a fast-track schedule, the commissioners were
requcsted to adopt the forgoing resolution. Initially the public hearing was scheduled for
September 12 but was moved forward to August 22 to meet the aggrcssive schedule. Via an
agreement they have until April 2006 to vacate the existing site but for a 103 I life-time
exchange the project needs to be complete by end of 2005.
BILL FAIR MADE A MOTION TO ADOPT A RESOLUTION REQUESTING THE
CITY COUNCIL CALL FOR A PUBL"lC HEARING DATE ON THE PROPOSED
MODIFICATION TO THE REDEVELOPMENT PLAN FOR CENTRAL MONTICELLO
REDEVELOPMENT PROJECT NO. I AND THE PROPOSED ESTABLISHMENT OF
TIF DISTRICT NO. 1-36. BRAD BARGER SECONDED THE MOTION AND WITH
NO FURTHER DISCUSSION, THE MOTION CARRIED.
C. Consideration to adont a resolution calling. for a public hearinl! on the proposed Busincss
Subsidy to Rocky Mountain Group LLC.
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Koropchak explained since Dahlheimer is receiving a business subsidy (land write-down) of
over $100,000, the HRA by Minnesota Statutes is rcquired to hold a public hearing. The
rcsolution simply requests the BRA call for such public hearing.
BRAD BARGER MADE A MOTION TO ADOPT A RESOLUTION CALLING FOR
THE PUBLIC HEARING ON THE PROPOSED BUSINESS SUBSIDY TO MOUNTAIN
ROCKY GROUP, LLC. SECONDED BY BILL FAIR AND WITH NO FURTHER
DISCUSSION, THE MOTION CARRIED.
3. Consideration to hire a firm for Redevelopment TIF District No. 1-35 inspection service.
Koropchak explained the HRA hires the inspection consultant and the developer pays for the
service. The Director has attempted to get clarification as to the education, role, qualifications,
and experience of an individual or firm acceptable to Bubul and Ruff to complete the inspection,
intcrpret the law, and prepare a written report. The LHB proposal: Not exceed $5,400 for
hourly basis fee plus reimbursement of inspection time and full report. The cost and appcarcd
monopoly is the issue with the developer and the HRA somewhat agrees; yet, acccpts their
attorney's recommendation. In previous discussion with Fluth, Koropchak had requested a
proposal from Pope. No proposal from Pope Architect was availablc at the July 18 HRA
meeting. Koropchak noted the project could not start or the TIF Plan be approved until after
approval of the inspection report by thc HRA and Council.
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IN LIEU OF TIMING AND SUBJECT TO SUBMISSION OF A PROPOSAL FROM
POPE ARCHITECT, BRAD BARGER MADE A MOTION TO HIRE POPE ARCHITECT
FOR INSPECTION SERVICES WITH THE DEVELOPER PAYING FULL COSTS AND
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HRA Special Meeting Minutes - 07/18/05
POPE ARCHITECT ACCEPT ABLE TO THE HRA ATTORNEY. IF NOT
ACCEPT ABLE TO THE HRA ATTORNEY TO PROCEED WITH HIRING LHB. BILL
FAIR SECONDED THE MOTION AND WITH NO FURTHER DISCUSSION, THE
MOTION CARRIED.
4. Other Business
Koropchak informed the commissioners that checking with the Chamber Office prior to further
investigation of the reported vacant Preferred Title Building owned by Kevin Heaton, the
Chamber said Preferred Title was closed for a few days of vacation and is up and running. The
Chamber suggested they put some plants in the window to give the appearance they are open
for business.
Koropchak noted a letter of no interest to purchase the Dino' s building was mailed to the
Swiecichowski's and a follow-up letter mailed to all Block 35 property owners.
Next HRA meeting - Wednesday, August 3, 2005.
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Adjournment.
BILL FAIR MADE A MOTION TO ADJOURN THE HRA SPECIAL MEETING. BRAD
BARGER SECONDED TIlE MOTION AND WITH NO FURTHER BUSINESS, THE
MEETING ADJOURNED AT 6:45 P.M.
Ollie Koropchak, Recorder
HRA Vice Chair
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MINUTES
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
Monday, June 27th, 2005
505 Walnut Street - Boom Room
Commissioners Present:
Steve Andrews, Brad Barger, Bill Fair, Darrin Lahr
Commissioners Absent:
Dan Frie
Council Liaison Absent:
Wayne Mayer
Staff Present:
Rick Wolfsteller, Ollie Koropchak, and Angela Schumann.
1. Call to Order
Chairman Lahr called the meeting to order at 5:30 PM and declared a quorum.
2. Consideration to approve the June I, 2005 HRA minutes.
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MOTION BY COMMISSIONER FAIR TO APPROVE THE MINUTES or
JUNE 1ST, 2005. MOTION SECONDED BY COMMISSIONER ANDREWS.
MOTION CARRIED WITH LAlIR ABSTAINING
3. Consideration of adding or removing items from the agenda.
NONE.
4. Consent Agenda.
a. Consideration fix infcmnation only: HRA requested to issue a tax
exempt bond for expenditure associated with the Monticello Ice Arena.
b. Consideration to review final draft of the Mission Statement for the
I lousing and redevelopment Authority.
c. Consideration to review revised 2004 year-end HRA Fund and TlF
Reports including interest income.
MOTION TO APPROVE THE CONSENT AGENDA BY COMMISSIONER
ANI)REWS. MOTION SECONDED BY COMMISSIONER FAIR.
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MOTION CARRIED. BARGER ABSTAINED FROM TilE MOTION DUE TO
POTENTIAL CONFLICT OF INTEREST DUE TO TNVOL VEMENT WITl-:l
MONTICELLO Il0CKEY ASSOCIATION.
HRA Minutes 6/27/2005
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5. Tabled - Consideration to approve a resolution adopting a modification to the
Redevelopment Plan and geographic boundaries for Central Minnesota
Redevelopment Proiect Plan No. 1 and establishing TIF District No. 1-34 (a
Renewal and Renovation District) and adopting the TIF Plan therefore.
Koropchak explained that this item had been tabled in order to receive the
findings for the establishment of the district. Previously, when published in the
paper, parcels 4A and 4B were not included. Koropchak noted that those parcels
needed to be included, as the majority of the SuperTarget lies on those parcels,
and would generate the most tax increment. As such, the notification had to be
republishcd. Koropchak also stated that Fischer did not have multiple parcels
included in his analysis. As one parcel, the area didn't meet the coverage
requirements. Koropchak noted that although the area will stilI qualify, the
coverage test would be revised based on the new parcel division. Koropchak
provided the Commissioners with a currcnt TIF information spreadsheet, noting
that the parcels were split only for the purposes of TIF, not for platting.
Lahr clarified that the Project No. I boundary expansion was meant to provide
increment specific to the individual area or TIF districts when applicable.
Koropchak reported that Chadwick agreed to be included within the boundary
expansion. Koropchak stated that his parcel needed to be included so that it was
contiguous to the current boundary.
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Koropchak noted that the Planning Commission had approved the districts for
consistency with the comprehensi ve plan and also that the judge has ruled for
public purpose on the A VI{ site.
Koropchak stated that Council will open and continue the public hearing to extend
the 30-day extension and notification period for comments. The Council can
approve the resolution on July 25th.
MOTION BY COMMISSIONER ANDREWS TO APPROVE THE
MODIFICA'rION OF THE REDEVELOPMENT PLAN AND THE
GEOGRAPHIC BOUNDARIES rOR CENTRAL MONTICELLO
REDEVELOPMETN PROJECT PL,AN NO. I AND ESTABLISHING TI F
DISTRICT NO. 1-34 AND ADOPTING TlIE TIF PLAN THEREFOR.
MOTION SECONDED BY BARGER. MOTION CARRIED.
Koropchak clarified that the 1'1 F dollars generated in this district are only to be
used for the City's portion of the expenses related to the interchange, not for
expenses related to Ryan's development.
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HRA Minutes 6/27/2005
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6. Consideration to adopt a resolution requesting the City Council call for a public
hearing date for modification of the Redevelopment Plan for Central Monticello
Redevelopment Proiect Plan No. I and establishing TI F District No. 1-35 (a
Redevelopment District) and TIF Plan.
This item held for discussion until the arrival of the applicant.
Koropcha~rrovided an updated schedule for the final app.ro:al scheduled. for
August 22 . Fluth had asked Koropchak to run some baSIC 1I1crement estImates.
Koropchak stated that the market value of the existing buildings had increased
beyond what had been estimated a few years before. Lahr asked for total current
City tax on the homes. Koropchak indicated that was not provided. It is
estimated that the new project will generate $15,056 in total new annual taxes,
using a $60.00 per square fi;Jot value. The local available annual tax increment is
approximately $9,900.
Upon arrival, Fluth reported that they are ready proceed, and that prospects arc
good with tenants. He stated that they are on verge of signing construction
contracts and would like to move forward with establishing the district.
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Koropchak reported that Fluth had asked some good questions regarding the
appraisal. Mike Fischer was asked to do a proposal for the appraisal. Lahr asked
when the change was made to require a walk through. Koropchak stated that the
laws after 1997, by which the HRA is required to do an inspcetion and report for
all redevelopment and renovation districts. Koropchak stated that her research
indicated that it was the HRA who hires the inspector. Part of the inspection
involves coverage tests and part is the interior inspection to find if the building is
structurally substandard. Fluth wants to know why this is necessary and then who
the appraiser needs to be. Fair asked if the report goes to the Auditor for review.
Koropchak stated that it goes to HRA and Council. Lahr clarified that in terms of
the two purposes noted above, that whomever the HRA' s attorneyi s comfortab Ie
with, the lIRA would be comfc)ftable with. Koropchak rcported that the attorney
stated that he does not suggest using the City's Building Official. Koropchak also
explained that the HRA will note that the change means that this isjust part of the
redevelopment process.
Andrews clarified that both the HRA' s financial representativc and attorney have
told the HRA to complete the required inspector. Andrews asked if F1uth is
asking HRA to depart from this recommendation. Fluth stated that he is not; he
disagrces with the cost to the applicant. Lahr stated that the reality is that
someone will build the City's case for the creation of this TIF district. Lahr stated
that while he agrees perhaps the HRA can't dictate who completes the report, he
does understand attorney's advicc to seek an impartial inspector. Koropchak
reported that prior to the law change, the City worked with the developer on thesc
items.
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I IRA Minutes 6/27/2005
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Fluth reviewed requirements outlined by the statute. Wolfsteller stated that the
attorney made it clear that they did not want the City to do the inspection; it
doesn't necessarily mean there aren't others who are qualified.
Fair stated that his preference is to allow Pluth to llnd an inspeetor and provide
documentation that they are qualified and can complete the appropriate report.
Lahr recommended calling Bubul to ask if this is acceptable.
The HRA recommended that Koropchak call Bubul to find out who they will
aecept. Fluth agreed.
MOTION BY COMMISSIONER FAIR ADOPT A RESOLUTION
REQUESTING THE CITY COUNCIL CALL FOR A PUBLIC HEARING
DATE FOR MODIFICATION OF 'fHE REDEVELOPMENT PLAN FOR
CENTRAL MONTICELLO REDEVELOPMENT PROJECT PLAN NO.1 AND
ESTABLISHING TIF DISTRICT NO. 1-35 (A REDEVELOPMENT DISTRICT)
AND TIF PLAN.
MUfION SECONDED BY COMMISSIONER BARGER. MOTION
CARRIED.
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7. Consideration to review the Appraisal for 154 West Broadwav and authorization
to make an offer to acquire.
Koropchak reviewed the results of the appraisal, stating that the value ranged
between $295,000 and $400,000. Lahr asked if the Mayor was aware of the
results of the appraisal. Koropchak stated that she had not spoken with him yet on
the matter.
Fair asked about the results of the Block 35 survey. Koropchak provided a
summary and then referred back to the appraisal. Koropchak stated that she was
surprised by the amount of tenants. If the tenants are still in the building at the
time of the offer, the HRA will have to pay relocation and she noted that business
relocation costs are also high. Fair stated that he doesn't think this is something
the HRA should proceed with at this time, as there is not a lot of interest by other
properties on the block to sell at this time.
Mayer stated that the original intent to purchase this property was because of the
strategic location. At that time, the tenant issue was an unknown quantity. Mayer
suggested that perhaps the HRA start at a different block. He noted that the
Preferred Title and Johnson block may be a more likely candidate.
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Koropchak stated that she had spoken to Ruff, who believed the appraisal was
high. Koropchak and Wolfsteller did not suggest the purchase at the appraisal
pnce
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lIRA Minutes 6/27/2005
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Lahr stated that as other retail opens in other parts of the community, the lIRA
needs to think about retail spaee or redevelopment oeeurring in the downtown
areas. Barger stated that what is really needed is the part of the block along 25 to
start a viable redevelopment project.
Koropehak reported that City staff would be meeting with a potential developer of
the theater block about their eoncept. They are making progress.
MOTION BY COMMISSIONER BARGER TO EXPRESS NO INTEREST TO
PURCHASE THE PROPERTY AT 154 WEST BROADWA Y.
MOTION SECONDED BY COMMISSIONER FAIR
Lahr added that it should be conveyed to the property owner that based on the
perceived cost of relocation, and the lack of interest by other parties on the block
in redevelopment, there is no interest at this point. Koropchak also noted
demolition costs and possible asbestos remediation.
MOTION CARRIED UNANIMOlJSL Y.
8. Consideration to authorize payment of HRA bills.
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MOTIONBY COMMISSIONER ANDREWS TO AUTHORIZE PAYMENT OF
HRA BILLS.
MOTION SECONDED BY COMMISSIONER BARGER. MOTION
CARRIED.
9. Consideration of the Executive Director's Report.
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Koropchak noted that she had visited three leads for the new industrial park.
Koropchak stated that one had stood out in terms of good paying jobs and the
proposed type of building. All three eompanies had been looking at Elk River for
relocation. Two of them indicated that if Elk River proceeds with their plans for
industrial land, they will relocate there. Koropchak explained that Elk River will
be doing pay-as-you-go and then writing down the land cost of $ ] .SO per square
foot to zero. She noted that Sherburne County will allow tax abatement which is
less costly and time consuming. If the County agrees, the County can collect for
13 years and the City] ] years. The extra years allow the City to write down the
land. Koropchak stated that each individual jurisdiction abates their taxes. This
is unlike TIF, where the City decides. Fair clarified that both the Couneil and
County would need to make that decision. Fair stated that if Council is interested
in such a program, they should get a full pro and con analysis from Ehlers.
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HRA Minutes 6/27/2005
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Koropchak stated that she isn't sure how the County Commissioners would feel
about that. Fair asked if both County and City needed to abate. Koropchak stated
they both do not have to, but without both, suiIieient increment would not be
collected. Barger asked if it was written down to $1 per square foot or to $1 total.
Koropchak stated that they had a formula, but basically $1 per lot. The businesses
Koropchak visited had commented that the reimbursement makes a big difference
to the property owners. Koropchak noted that Elk River only has two or three
parcels left:.
On June 131h, Colliers had done a presentation on listing the City's industrial park.
They had left Council a proposal. Lahr stated that his impression is that they are a
networking real estate firm that gets 6-8% on every sale and that they would like
exclusive rights to sell. LaIn stated that there is some truth that commercial
agents may not come out unless they arc making a commission. Koropchak
reported that the City of Cambridge does pay a commission. Koropchak stated
that currently, the marketing technique the City of Monticello is using doesn't
mean that the City won't pay a commission.
Barger stated that he doesn't have a problem olTering a commission.
10. Committee Reports:
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Fiher Optics - Andrews reported that the group will meet weekly until August yd.
The group is an ad hoc committee which currently includes an expert in fiber
optics projects. The Council has committed funds to facilitate her involvement.
There may be a chance that the \-IRA will be asked to help defray the cost for
planning. Andrews stated that he believed fiber optics would set the community
apart in terms of competitive advantage and marketing. At this time, the group is
unccrtain of the extent ofthc infrastructure system. Andrews stated that it would
be well worth the money to have the expcrt assist throughout the process.
Bargcr asked if there are any communities that currcntly have fiber optics. Mayer
stated that Albertville's Towne Lakes does have it. Koropchak rcported that Elk
River is looking at fiber optics, but not sure in what capacity.
Fair asked why Council wouldn't fund more than 4 hours of consulting. Mayer
statcd that at the time that the consultant had prcsented a proposal, thc Council
wasn't certain if there was cnough interest. Mayer stated that they would most
likely come back and ask fiJr the balance.
Fair asked who would handle the product. Mayer stated that the City can handlc
it or source it out to suppliers. Fair askcd about cont1ict with Charter franchise.
Wolfsteller explained that the contract with Charter does not eliminate
competition, it just means they have to provide same serviecs. Andrews stated
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HRA Minutcs 6/27/2005
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that the task force will be charged with looking at all the current agreements in
place and potcntial impacts.
Koropchak reported that Dahlheimer's arc now looking at the City's lot. Staff
have a meeting with them this week.
11. Other Busincss
Pair recommended looking at thc potential purchase of the Preferred Title
building to encourage redevelopment of that block.
12. Adjournment
MOTION BY COMMISSIONER FAIR TO ADJOURN AT 6:45 PM.
MOTION SECONDED BY COMMISSIONER ANDREWS. MOTION
CARRIED.
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Secretary
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HRA Agenda - 08/16/05
4.
Consideration to approve a resolution adoptim~ of the modification to the
Redevelopment Plan for Central Monticello Redevelopment Proiect No.1 and
establishine TIF District No. 1-36 therein and the adoption of the TIF Plan therefor.
Applicant: Rockv Mountain Group, LLC.
A. Reference and Bael{~round:
TIF District No. 1-36, an Economic District, is being created to assist with land writc-down,
infrastructure costs, and trunk and park fees associated with thc land sale to Rocky Mountain
Group, LLC. Rocky Mountain Group, LLC plans to construct a 54,000 sq it
office/distribution center in the city-owned industrial park known as the Monticello Business
Center. The proposed projcct will retain 28 full-time pcrmancnt jobs at an average wage levcl
of $20.21 per hour without bcncfits and create an additional thrcc jobs flJr a combined average
wage level of $19.90 pcr hour without benefits.
On July 25,2005, the City Council callcd for a public hearing datc of August 22, 2005, and on
August 8, 2005, the City Council approved the iinal plat fl)f Lot 1, Block I, Otter Creek
Crossing 1 st Addition. On August 2, thc Planning Commission approvcd a resolution iinding
the proposcd TIF District project conformed with thc redevelopment and dcvelopmcnt goals
for the city of Monticcllo.
The proposed TIP Plan was distrihutcd to the County and School District on July 22,2005,
thereby meeting the 30-day noticc for comment prior to thc puhlic hearing of the Council on
August 22,2005.
'l'hc attachcd rcsolution for approval states thc findings of the HRA and authorizes the HRA
Dircctor to proceed.
TIF District 1-36, an Economic District, has a life duration of 11 years and collccts tax
increment over 9 years. An Economic District must creatc ncw jobs and can be used to assist
manufacturing, warehousing, and distribution centers.
The attached maps show the boundaries of the Redevelopmcnt Project No.1 and proposed
TIF District 1-36. Based on the TIP Cashflow ran by Ehlers & Associates using a market
value of $61.48 per square foot and 5% interest rate, thc project is estimated to gcncratc
approximatcly $450,000 NPV of tax incrcmcnt over the life ofthc district.
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HRA Agenda - 08/16/05
B.
Alternative Action:
1. A motion to approve a resolution adopting the modification to the Redevelopment Plan
for Central Monticello Redevelopment Project No.1 and establishing TIF District No.
1-36 therein and the adoption of the TIF Plan therefor.
2. A motion to deny approval of the resolution adopting the modification.......................
3. A motion to table any action.
C. Recommendation:
The City Administrator and HRA Executive Director recommend alternative no. 1. Although
the project does not create a great number of new jobs; the current and proposed new wage-
levels are high, it encourages the retention of a business who has supported the community over
the years, and assists in the implementation of the project for redevelopment and construction of
the I-94/Cty Road 18 Interchange.
D. Supportilll! Data:
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Resolution for adoption, maps and TIP Plan.
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MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
CITY OF MONTICELLO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO.
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT
PLAN FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1
AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1-36
THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN
THEREFOR.
WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the
Monticello Housing and Redevelopment Authority (the "I--IRA") and the City of Monticello (the "City")
that the HRA adopt a Modification to the Redevelopment Plan for Central Monticello Redevelopment
Project No. I (the "Redevelopment Plan Modification") and establish Tax Increment Financing District
No. 1-36 and adopt a Tax Increment Financing Plan (the "TlF Plan") therefor (the Redevclopmcnt Plan
Modification and the TlF Plan are referred to collectively herein as the "Plans"), all pursuant to and in
conformity with applicable law, including Minnesota Statutes, Sections 469.001 to 469.047, and Sections
469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the
Board's consideration; and
WI-IEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to
be prepared; and
WHEREAS, thc HRA has performed all actions required by law to be performed prior to the
adoption of the Plans. The HRA has also requested the City Planning Commission to provide for review
of and written comment on the Plans and that the Council schedule a public hearing on the Plans upon
published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
I. The HRA hereby finds that Tax Increment Financing District No. 1-36 is in the public
interest and is an "economic development district" under Minnesota Statutes, Section 469.174, Subd. ] 2,
and finds that the Plans conform in all respects to the requirements of the Act and will help fulfill a need
to develop an area of the State of Minnesota whieh is underutilized and that the adoption of the proposed
Plans will discourage commerce and industry from moving their operations to another state or
municipality and thereby serves a public purpose.
') The HRA further finds that the Plans will afford maximum opportunity, consistent with
the sound needs for the City as a whole, for the development or redevelopment of the project area by
private enterprise in that the intent is to provide only that public assistance necessary to make the private
developments financially feasible.
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expanded.
The boundaries of Central Monticello Redevelopment Project No. I are 110t being
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Conditioned upon the approval thereof hy the City Council following its public hearing
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thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted
and shall be placed on file in the office of the Executive Director ofthe HRA.
5. Upon approval of the Plans by the City Council, the staff, the HRA's advisors and legal
counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose
to negotiate, draft, prepare and present to this Board for its consideration all further plans, resolutions,
documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval
of any project or a Deve]opment Agreement with any developer.
6. Upon approval of the Plans by the City Council, the Exeeutive Director of the HRA is
authorized and directcd to forward a copy of the Plans to the Minnesota Department of Revcnue and
Office of the State Auditor pursuant to Minnesota Statutes 469.175, Subd. 4a.
7. The Executive Director of the HRA is authorized and direeted to forward a copy of the
Plans to thc Wright County Auditor and request that the Wright County Auditor certify the original tax
capacity of the District as described in the Plans, all in accordance with Minnesota Statutes 469.177.
Approved by the Board of Commissioners of the Monticello Housing and Redevelopment
Authority this 16th day of August, 2005.
Chair
ATTEST:
Secretary
.
.
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MODIFICATION TO THE REDEVELOPMENT PLAN
FOR CENTRAL MONTICEllO REDEVELOPMENT PROJECT NO.1
and the
TAX INCREMENT FINANCING PLAN
for the establishment of
TAX INCREMENT FINANCING DISTRICT NO. 1-36
(an economic development district)
within
CENTRAL MONTICEllO REDEVELOPMENT PROJECT NO.1
*
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
CITY OF MONTICELLO
WRIGHT COUNTY
STATE OF MINNESOTA
Public Hearing: August 22, 2005
Adopted:
. This document is in draft form for distribution to the County and the School District. The TIF
Plan contains the estimated fiscal and economic implications of the proposed TIF District. The
City and the HRA may make minor changes to this draft document prior to the public hearing.
.
EHLERS
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
& ASSOCIATES INC
.
.
.
TABLE OF CONTENTS
(for reference purposes only)
SECTION I - MODIFICA TION TO THE REDEVELOPMENT PLAN
FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1. . . . . . . . . . .. 1-1
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1-1
SECTION 11- TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-36 . . . . . . . . . . . . . . . . . . . . . .. 2-1
Subsection 2-1. Foreword.............................................. 2-1
Subsection 2-2. Statutory Authority ....................................... 2-1
Subsection 2-3. Statement of Objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1
Subsection 2-4. Redevelopment Plan Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-1
Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2
Subsection 2-6. Classification of the District ................................ 2-2
Subsection 2-7. Duration of the District .................................... 2-3
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Valuellncrement and Notification of Prior Planned Improvements ............... 2-3
Subsection 2-9. Sources of Revenue/Bonded Indebtedness ...... . . . . . . . . . . . . .. 2-4
Subsection 2-10. Uses of Funds .......................................... 2-5
Subsection 2-11. Business Subsidies ...................................... 2-6
Subsection 2-12. County Road Costs ...................................... 2-7
Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions. . . . . . . . . . . . . . . .. 2-7
Subsection 2-14. Supporting Documentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-8
Subsection 2-15. Definition of Tax Increment Revenues ........................ 2-8
Subsection 2-16. Modifications to the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2-8
Subsection 2-17. Administrative Expenses .................................. 2-9
Subsection 2-18. Limitation of Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10
Subsection 2-19. Use of Tax Increment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-10
Subsection 2-20. Excess Increments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11
Subsection 2-21. Requirements for Agreements with the Developer . . . . . . . . . . . . . . 2-11
Subsection 2-22. Assessment Agreements ....... . . . . . . . . . . . . . . . . . . . . . . . . . . 2-11
Subsection 2-23. Administration of the District. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12
Subsection 2-24. Annual Disclosure Requirements ... . . . . . . . . . . . . . . . . . . . . . . . . 2-12
Subsection 2-25. Reasonable Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-12
Subsection 2-26. Other Limitations on the Use of Tax Increment ................ 2-12
Subsection 2-27. Summary............................................. 2-13
APPENDIX A
PROJECT DESCRIPTION ............................................... A-1
APPENDIX B
MAPS OF CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO. 1 AND THE
DISTRICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT. . . . . . . . . . . . . C-1
APPENDIX D
ESTIMATED CASH FLOW FOR THE DiSTRiCT.... .... .. ..' ... .. ........ .. .. D-1
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.
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SECTION I - MODIFICA TION TO THE REDEVELOPMENT PLAN
FOR CENTRAL MONTICELLO REDEVELOPMENT PROJECT NO.1
Foreword
The following text represents a Modification to the Redevelopment Plan for Central Monticello
Redevelopment Project No.1. This modification represents a continuation of the goals and objectives set
forth in the Redevelopment Plan for Central Monticello Redevelopment Project No.1. Generally, the
substantive changes include the establishment of Tax Increment Financing District No. 1-36.
For further information, a review of the Redevelopment Plan for Central Monticello Redevelopment Project
No. I is recommended. It is available from the Executive Director of the HRA at the City of Monticello.
Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment
Financing Districts located within Central Monticello Redevelopment Project No. I.
Monticello Housing and Redevelopment Authority Modification to the Redevelopment Plan for Central Monticello Redevelopment Project No. I I-I
.
.
.
SECTION 11- TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-36
Subsection 2-1. Foreword
The Monticello Housing and Redevelopment Authority (the "HRA"), the City of Monticello (the "City"),
staff and consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No. 1-36 (the "District"), an economic development tax increment financing district,
located in Central Monticello Redevelopment Project No. 1.
Subsection 2-2. Statutory Authority
Within the City, there exists areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the HRA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S. "), Sections 469.001 to 469.047, inclusive, as amended, and MS., Sections 469.174 to
469.1799, inclusive, as amended (the "Tax Increment Financing Act" or "TIP Act"), to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIP Plan") for Tax Increment Financing
District No. 1-36. Other relevant information is contained in the Modification to the Redevelopment Plan
for Central Monticello Redevelopment Project No.1.
Subsection 2-3. Statement of Objectives
The District currently consists of two parcels ofland and adjacent and internal rights-of-way. The District
is being created to facilitate construction of a 54,000 s.f. office/warehouse facility in the City of Monticello .
Please see Appendix A for further project information. Contracts for this have not been entered into at the
time of preparation of this TIP Plan, but development is likely to occur ih late 2005. This TIF Plan is
expected to achieve many of the objectives outlined in the Redevelopment Plan for Central Monticello
Redevelopment Project NO.1.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of Central Monticello Redevelopment Project No. 1 and the District.
Subsection 2-4. Redevelopment Plan Overview
1. Property to be Acquired - Selected property located within the District may be acquired by
the HRA or City and is further described in this TIP Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
MS., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the HRA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The HRA or City may perform or provide for some or all necessary acquisition,
construction, relocation, demolition, and required utilities and public street work within the
District.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-\
.
.
.
5. The City proposes infrastructure facilities within the District, no additional open space
within the District, no environmental controls specific to the District, proposed reuse of
private property as an office/warehouse facility, and continued operation of Central
Monticello Redevelopment Project No. 1 after the capital improvements within Central
Monticello Redevelopment Project No. 1 have been completed.
Subsection 2-5.
Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below. See the map in Appendix B for further information on the location of the District.
Parcel Numbers
155-171-002010
213-141-002010*
*This parcel has been annexed into the City limits. The parcel is being
replatted and a new parcel number will be assigned by Wright County.
The HRA or City currently owns the property to be included in the District.
Subsection 2-6. Classification of the District
The HRA and City, in determining the need to create a tax increment financing district in accordance with
M.S, Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is an
economic development district pursuant to MS, Section 469.174, Subd. 12 as defined below:
"Economic development district" means a type of tax increment financing district which consists of any
project, or portions of a project, which the authority finds to be in the public interest because:
(I) it will discourage commerce, industry, or manufacturingfrom moving their operations
to another state or municipality; or
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the tax base of the state.
The District is in the public interest because it will meet the statutory requirement from clause 1.
Pursuant to MS, Section 469.176, Subd. 4c, revenue derived from tax increment from an economic
development district may not be used to provide improvements, loans, subsidies, grants, interest rate
subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, ifmore
than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a
purpose other than:
(1) The manufacturing or production of tangible personal property, including processing resulting
in the change in condition of the property;
(2) Warehousing, storage, and distribution of tangible personal property, excluding retail sales;
(3) Research and development related to the activities listed in items (1) or (2);
(4) Telemarketing if that activity is the exclusive use of the property;
(5) Tourism facilities; or
(6) Qualified border retail facilities;
(7) Space necessary for and related to the activities listed in items (1) to (6)
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-2
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In meeting the statutory criteria the BRA and City rely on the following facts and findings:
The facilities in the District meet the conditions of Purposes 2 and 7.
The District is being created to assist in the construction of a warehousing and distribution facility for
Dahlheimer Distributing. The proposed facility will be used for storing and distributing beverages and
related activities.
Pursuant to MS., Sections 469.176 Subd. 7, the District does not contain any parcel or part of Ii parcel that
qualified under the provisions of M.s., Sections 273.111 or 273.112 or Chapter 473Hfor taxes payable in
any of the five calendar years before the filing of the request for certification of the District.
Subsection 2-7. Duration of the District
Pursuantto MS., Section 469.175, Subd. 1, and M.S., Section 469.176, Subd. 1, the duration of the District
must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b, the duration of the
District will be 8 years after receipt of the first increment by the HRA or City. The date of receipt by the
City of the first tax increment is expected to be 2007. Thus, it is estimated that the District, including any
modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2015, or when
the TIF Plan is satisfied. If increment is received in 2008, the term of the District will be 2016. The HRA
or City reserves the right to decertify the District prior to the legally required date.
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Valuellncrement and Notification of Prior Planned Improvements
Pursuant to MS., Section 469.174, Subd. 7 and MS., Section 469.177, Subd. I, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2005 for taxes payable 2006.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2008) the amount by which the original value has increased or decreased as a result of;
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries ofthe district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use ofthe property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC,
no value wiIl be captured and no tax increment wiIl be payable to the HRA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2006, assuming the
request for certification is made before June 30, 2006. The ONTC and the Original Local Tax Rate for the
District appear in the table on the foIlowing page.
Pursuant to M.S., Section 469.174 Subd. 4 and MS., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within Central Monticello Redevelopment Project No. I,
upon completion ofthe project, will annuaIly approximate tax increment revenues as shown in the table on
the following page. The HRA and City request 100 percent of the available increase in tax capacity for
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2.3
.
repayment of its obligations and current expenditures, beginning in the tax year payable 2007. The Project
Tax Capacity (PTC) listed is an estimate of values when the project is completed.
Project Estimated Tax Capacity upon Completion (pTC) -
Original Estimated Net Tax Capacity (ONTC)
Estimated Captured Tax Capacity (CTC)
Original Local Tax Rate
Estimated Annual Tax Increment (CTC x Local Tax Rate)
Percent Retained by the BRA
$65,650
$3,587
$62,063
1.22111
$75,786
Pay 2005
100%
Pursuant to MS., Section 469.177, Subd. 4, the HRA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to MS.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuantto MS, Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
.
The City of Monticello is reviewing the area to be included in the District to determine if any building
permits have been issued during the 18 months immediately preceding approval of the TIF Plan by
the City.
Subsection 2.9. Sources of Revenue/Bonded Indebtedness
Public improvement costs, utilities, streets and sidewalks, and site preparation costs and other costs outlined
in the Uses of Funds will be financed primarily through the annual collection of tax increments. The lIRA
or City reserves the right to use other sources of revenue legally applicable to the HRA or City and the TIP
Plan, including, but not limited to, special assessments, general property taxes, state aid forroad maintenance
and construction, proceeds from the sale of land, other contributions from the developer and investment
income, to pay for the estimated public costs.
The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIP
Plan. As presently proposed, the project will be financed by a G.O. bond issue and interfund loan/transfer.
Additional indebtedness may be required to finance other authorized activities. The total principal amount
of bonded indebtedness, including a general obligation (GO) TIF bond, or other indebtedness related to the
use of tax increment financing will not exceed $600,000 without a modification to the TIF Plan pursuant to
applicable statutory requirements. It is estimated that $100,000 in interfund loans will be financed with tax
increment revenues. It is estimated that a maximum of $500,000 in bonded indebtedness will be financed
with tax increment revenues.
.
This provision does not obligate the HRA or City to incur debt. The HRA or City will issue bonds or incur
other debt only upon the determination that such action is in the best interest of the City. The HRA or City
may also finance the activities to be undertaken pursuant to the TIF Plan through loans from funds of the
HRA or City or to reimburse the developer on a "pay-as-you-go" basis for eligible costs paid for by a
developer.
Monticello Housing and Redevelopment Authority
Tax Increment financing Plan for Tax Increment Financing District No. 1-36
2-4
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The estimated sources of funds for the District are contained in the table below.
SOURCES OF FUNDS
TOTAL
$680,000
$20,000
$700,000
$100,000
$500,000
Tax Increment
Interest
PROJECT REVENUES
Interfund Loans
Bond Proceeds
Subsection 2.10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate construction of a 54,000 s.f.
office/warehouse facility. The HRA and City have determined that it will be necessary to provide assistance
to the project for certain costs. The HRA has studied the feasibility of the development or redevelopment
of property in and around the District. To facilitate the establishment and development or redevelopment
of the District, this TIP Plan authorizes the use of tax increment financing to pay for the cost of certain
eligible expenses. The estimate of public costs and uses offunds associated with the District is outlined in
the following table.
USES OF FUNDS TOTAL
. Land/Building Acquisition $50,000
Site Improvements/Preparation $50,000
Public Utilities $200,000
Streets and Sidewalks $200,000
Interest $132,000
Administrative Costs (up to 10%) $68,000
PROJECT COSTS TOTAL $700,000
Interfund Loans $100,000
Bond Principal $500,000
The above budget is organized according to the Office of State Auditor (OSA) reporting forms.
It is estimated that the cost of improvements, including administrative expenses which will be paid or
financed with tax increments, will equal $700,000 as is presented in the budget above.
.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIP Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S., Section 469.1763, Subd. 2, no more than 20 percent ofthe tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of Central Monticello Redevelopment Project No.1, (including administrative costs, which
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-5
.
are considered to be spent outside of the District) subject to the limitations as described in this TIF Plan.
Subsection 2-11,
Business Subsidies
Pursuant to MS. Sections 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
. (11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
A business subsidy ofless than $25,000;
Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts,.provided that
the assistance is equal to or less than 50% ofthe total cost;
Assistance to provide job readiness and training services if the sole purpose of the assistance is
to provide those services;
Assistance for housing;
Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
Assistance for energy conservation;
Tax reductions resulting from conformity with federal tax law;
Workers' compensation and unemployment compensation;
Benefits derived from regulation;
Indirect benefits derived from assistance to educational institutions;
Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 50 I (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
Assistance for a collaboration between a Minnesota higher education institution and a business;
Assistance for a tax increment financing soils condition district as defined under MS., Section
469.174, Subd. 19;
Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more ofthe assessor's current year's estimated market value;
General changes in tax increment financing law and other general tax law changes of a principally
technical nature.
Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
Funds from dock and wharf bonds issued by a seaway port authority;
Business loans and loan guarantees of$75,000 or less; and
Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration.
The HRA will comply with M.S., Section 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIP Plan does not fall under any of the above exemptions.
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Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment financing District No. 1-36
2-6
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Subsection 2-12. County Road Costs
Pursuant to M.S., Section 469.175, Subd. J a, the county board may require the HRA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgement of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the HRA or City within forty-
five days of receipt of this TIP Plan. In the opinion of the HRA and City and consultants, the proposed
development outlined in this TIP Plan will have little or no impact upon county roads, therefore the TIP Plan
was not forwarded to the county 45 days prior to the public hearing. The HRA and City are aware that the
county could claim that tax increment should be used for county roads, even after the public hearing.
Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing j urisdictions assumes that the redevelopment contemplated by the TIP
Plan would occur without the creation of the District. However, the HRA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows ifthe "but for" test was not met:
IMPACT ON TAX BASE
.
Wright County
City of Monticello
Monticello ISD No. 882
2004/2005
Total Net
Tax Capacity
90,204,086
11,863,014
18,405,444
Estimated Captured
Tax Capacity (CTC)
Upon Completion
62,063
62,063
62,063
Percent of CTC
to Entitv Total
0.0688%
0.5232%
0.3372%
IMPACT ON TAX RATES
Wright County
City of Monticello
Monticello ISO No. 882
Other (Hospital)
Total
2004/2005 Percent Potential
Extension Rates of Total CTC Taxes
0.344140 28.18% 62,063 21,358
0.586510 48.03% 62,063 36,401
0.263790 21.60% 62,063 16,372
0.026670 2.18% 62.063 1.655
1.221110 100.00% 75,786
.
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual2004/Pay 2005 rate. The total net capacity for the entities listed above are
based on actual Pay 2005 figures. The District will be certified under the actual2005/Pay 2006 rates, which
were unavailable at the time this TIP Plan was prepared.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-7
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Subsection 2-14. Supporting Documentation
Pursuant to MS. Section 469.175 Subd 1, clause 7 the TIP Plan must contain identification and description
of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause (2)
and the findings are required in the resolution approving the TIF district. Following is a list of reports and
studies on file at the City that support the Authority's findings:
· A list of applicable studies, if any, will be listed here prior to the public hearing.
Subsection 2-15. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S,
Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was
purchased by the Authority with tax increments;
3. Principal and interest received on loans or other advances made by the Authority with tax
increments;
4. Interest or other investment earnings on or from tax increments;
2. Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
3. The market value homestead credit paid to the Authority under MS, Section 273.1384.
Subsection 2-16. Modifications to the District
In accordance withM.S, Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of Central Monticello Redevelopment Project No.
1 or the District, if the reduction does not meet the requirements of M.S., Section 469.175, Subd.
4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the original TIP
Plan, or to increase or decrease the amount of interest on the debt to be capitalized;
4. Increase in the portion of the captured net tax capacity to be retained by the HRA or City;
5. Increase in the estimate of the cost of the project, including administrative expenses, that will be paid
or fmanced with tax increment from the District; or
6. Designation of additional property to be acquired by the HRA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIP Plan.
Pursuant to MS., Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall
not be enlarged after five years following the date of certification of the original net tax capacity by the
county auditor. If an economic development district is enlarged, the reasons and supporting facts for the
determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 12 must be
documented in writing and retained. The requirements of this paragraph do not apply if (1) the only
modification is elimination of parcel(s) from Central Monticello Redevelopment Project No.1 or the District
and (2) (A) the current net tax capacity of the parcel(s) eliminated from the District equals or exceeds the
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-8
.
.
.
net tax capacity of those parcel(s) in the District's original net tax capacity or (B) the HRA agrees that,
notwithstanding M.S, Section 469.177, Subd. 1, the original net tax capacity will be reduced by no more than
the current net tax capacity of the parcel(s) eliminated from the District.
The HRA or City must notify the County Auditor of any modification that reduces or enlarges the geographic
area of Central Monticello Redevelopment Project No.1 or the District. Modifications to the District in the
form of a budget modification or an expansion of the boundaries will be recorded in the TIP Plan.
Subsection 2-17. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
HRA or City, other than:
1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
project;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
project; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant toMS., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982,
administrative expenses also include amounts paid for services provided by bond counsel, fiscal consultants,
and planning or economic development consultants. Pursuant to MS., Section 469.176, Subd. 3, tax
increment may be used to pay any authorized and documented administrative expenses for the District up
to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIP Plan
or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District,
whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District. The county may require payment of those
expenses by February 15 of the year following the year the expenses were incurred.
Pursuant to M.S, Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the HRA or City and the County Treasurer shall pay the amount
deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor
for the cost of financial reporting of tax increment financing information and the cost of examining and
auditing authorities' use of tax increment financing. This amount may be adjusted annually by the
Commissioner of Revenue.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax htcrement Financing District No. 1-36
2-9
Subsection 2~18. Limitation of Increment
.
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other
escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity
or redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
.
if, after four years from the date of certification of the original net tax capacity of the tax increment
financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of
property or other site preparation, including qualified improvement of a street adjacent to a parcel
but not installation of utility service including sewer or water systems, has been commenced on a
parce/located within a tax increment financing district by the authority or by the owner of the
parcel in accordance with the tax increment financing plan, no additional tax increment may be
taken from that parcel and the original net tax capacity of that parcel shall be excluded from the
original net tax capacity of the tax increment financing district. If the authority or the owner of the
parcel subsequently commences demolition, rehabilitation or renovation or other site preparation
on that parcel including qualified improvement of a street adjacent to that parcel, in accordance
with the tax increment financing plan, the authority shall certify to the county auditor that the
activity has commenced and the county auditor shall certify the net tax capacity thereof as most
recently certified by the commissioner of revenue and add it to the original net tax capacity of the
tax increment financing district. The county auditor must enforce the provisions of this subdivision.
The authority must submit to the county auditor evidence that the required activity has taken place
for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth
year following the year in which the parcel was certified as included in the district. For purposes
of this subdivision, qualified improvements of a street are limited to (1) construction or opening of
a new street, (2) relocation of a street, and (3) substantial reconstruction or rebuilding of an existing
street.
The HRA or City or a property owner must improve parcels within the District by approximately August,
2009 and report such actions to the County Auditor.
Subsection 2~19. Use of Tax Increment
The HRA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
1.
2.
3.
4.
5.
6.
. 7.
To pay the principal of and interest on bonds issued to finance a project;
to finance, or otherwise pay public redevelopment costs of the Central Monticello Redevelopment
Project No.1 pursuant to the MS., Sections 469.001 to 469.047;
To pay for project costs as identified in the budget set forth in the TlF Plan;
To finance, or otherwise pay for other purposes as provided in MS., Section 469.176, Subd. 4;
To pay principal and interest on any loans, advances or other payments made to or on behalf of the
HRA or City or for the benefit of Central Monticello Redevelopment Project No.1 by a developer;
To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
MS., Chapter 462C M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
Monticello Housing and Redevelopment Authority
Tax Increment financing Plan for Tax Increment Financing District No. 1-36
2-10
.
through 469.165, and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Subsection 2~20.
Excess Increments
Excess increments, as defined inM.S., Section 469.176, Subd. 2, shall be used only to do one or more ofthe
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The HRA or City must spend or return the excess increments under paragraph (c) within nine months after
the end of the year. ill addition, the HRA or City may, subject to the limitations set forth herein, choose to
modify the TIF Plan in order to finance additional public costs in Central Monticello Redevelopment Project
No. 1 or the District.
Subsection 2~21.
Requirements for Agreements with the Developer
.
The HRA or City will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
other drawings or narrative deemed necessary by the HRA or City to demonstrate the conformance of the
development with City plans and ordinances. The HRA or City may also use the Agreements to address
other issues related to the development.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the HRA or City as a result
of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments
from property acquired is pledged, unless prior to acquisition in excess of 1 0 percent of the acreage, the HRA
or City concluded an agreement for the development of the property acquired and which provides recourse
for the HRA or City should the development not be completed.
Subsection 2~22. Assessment Agreements
.
Pursuant to M.S., Section 469.177, Subd. 8, the HRA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-1\
.
Subsection 2-23. Administration of the District
Administration of the District will be handled by the Executive Director of the HRA.
Subsection 2-24. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the HRA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor, County Board, County Auditor and
School Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an
annual statement shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 2-25. Reasonable Expectations
.
As required by the TIP Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing would be less than the increase in the market
value estimated to result from the proposed development after subtracting the present value ofthe projected
tax increments for the maximum duration of the District permitted by the TIP Plan. In making said
determination, reliance has been placed upon written representation made by the developer to such effects
and upon HRA and City staff awareness of the feasibility of developing the project site. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D, and indicates that the increase in estimated market value of the proposed development (less the indicated
subtractions) exceeds the estimated market value ofthe site absent the establishment ofthe District and the
use of tax increments.
Subsection 2-26. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Central
Monticello Redevelopment Project No.1 pursuant to the M.S., Sections 469.001 to 469.047. Tax
increments may not be used to circumvent existing levy limit law. No tax increment may be used for the
acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and
regularly for conducting the business of a municipality, county, school district, or any other local unit
of government or the state or federal government. This provision does not prohibit the use of revenues
derived from tax increments for the construction or renovation of a parking structure.
.
2. PoolinlZ Limitations. At least 80 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 20 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside ofthe District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-12
.
.
.
3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 80 percent test set forth in paragraph (2) above only if the five year rule
set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification ofthe District, 80 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth inM.S., Section 469.1763, Subd. 5.
Subsection 2-27.
Summary
The Monticello Housing and Redevelopment Authority is establishing the District to preserve and enhance
the tax base, and provide employment opportunities in the City. The TIP Plan for the District was prepared
by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651)
697-8500.
Monticello Housing and Redevelopment Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-36
2-13
.
..
.
APPENDIX A
PROJECT DESCRIPTION
The HRA will be selling 8.6 acres ofland to a local company, Dahlheimer Distributing, relocated as a part
of the new freeway interchange project in the HRA's Otter Creek business park. The 54,000 s.f.
office/warehouse facility will be built by the end of 2005. The assistance is in the form of up-front
writedown of assessments, trunk utility fees, and park dedication. The City will use TIF to repay itself for
a 429 G.O. hnprovement bond and inter-fund loans for grading, streets, utilities and park dedication. The
value of the building and land is estimated at $3,320,000. Interest costs are estimated at 5%.
The business will pay $.95 per s.f. ofland for the first five acres and $2.15 for the remaining 3.6 acres in cash
at closing.
APPENDIX
A-I
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APPENDIX C
DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
Parcel Nwnbers Owner
155-171-002010 City of Monticello
213-141-002010* City of Monticello
*This parcel has been annexed into the City limits. The parcel is being
replatted and a new parcel number will be assigned by Wright County.
APPENDIX
C-l
7=005
Page 1 of 2
-.' ..............1.. EHLERS
.-.r: t.:-:41.I:,jj,IIIAlrl'ltll:
.
Dahlheimer's
CITY OF MONTICELLO - Rocky Mountain Group, LLC
54,000 sqlft O1'ficelDlstribution Center - TIF District 1-36
Dlstticl Type
DlstticlNumber
Inflation Rate - Eyery Veer
Pey-A... Vou-Go Interest Rate
Note I..ued Date (Present V.lue Date)
Locol Tex Rate - Maximum
Fi.cal Dlspal1tles E1oction (A.lnslde or B-outsido)
Veer District w.. cortified
Assumes First Tax Increment For District.
Vear DI.triot wes modified
Development Iocetod in modified erea
Assumes First Tex Inctement tor Projoot
Veers of Tex Increment
Assumes laSt Year of Tax Increment
Now Economic Development Dlstrfct
1-36
0.0000%
5.0000%
01-AUg-ll5
122. 1100% Pay 2005
NJA
Pay 2006
2007
NJA
No
2007
9
2015
Rscal Dlsparitias Ratio
Fiseel DI.paMti.. Motro Wide Tex Rat.
Locol Tex Rats. Cunant
State Wide Property Tex Rate (used for totoll8xos)
Mer1<et Vatu. Tex Rate (used tor tolollexes)
0.0000%
O.OOOO"'\'
122. 1 100% Pey 2005
51.1210% Pey2oo5
0,0544% Pey 2005
Comm",,"ellndustriat CI... Rate
F;rst 150,000
Over 150,000
Renllill Closs Rete
Resldental Closs Rate
First 500,000
Over 500,000
1.50%-2.00%
1.50%
2.00%
1.25%
1.00%-1.25%
1.00%
1.25%
--
.
Class Rate After
Property Land Building ToIol Class Ba.se After Conversion Date
MeplD PIO Owner Marl<et V.lue Mar1<et Value Mar1<et Value Rate Tax Can.clly Conversion Tax Ca"acltv Payable
1 155-171.<102010 CIty or Montlctio 10,455 0 10,455 Municipal ~empt 1.50%--2.00% 157 2006
2 213-141-llQ2010 """,,""",- 209 014 0 209,014 Munlcl".1 Exem'" 1.50%-2.00% 3,430 2006
Totals 219 <169 3587
N""':
1. Land yalue ha. been prorated to represent 8.6 .cre..
ToIol Marl<et V.lue Taxes Per ToIol Marl<et Cia.. Project Ve.r Pate
Ph3lB8 U.e Sn. RJUnlts Sll. R./Unlts So. R./Unlts Taxes Value Rate T.. Caoacltv Cons!nJcted Payable
1 Commarcial 54,000 61,46 $2.14 115,53' 3320,000 1.50%--2.00% 65 650 2005 2007
TOTAL 115531 3,320 000 65 650
Note:
1. Tax ostlmat08 are based on market value.
2. TIF run MSUmes 100% of the building ie constructod by January 2,2006 for payable 2007.
ToIol Local Fiscal Local Fls..1 State-wlde Fiscal State..wlde Mar1<et
Use T.x T.x Disparities Tax Disparities Property Local Diaparltie. Property Value ToIol
C.oacltv CaDacltv Tax C.".cltv Rate Tax Rate Ta. Rate Taxes Taxes Taxes T.xes T....
Commercial &5 &50 65 6l>O 0 1.22110 0.00000 0.51121 80 165 0 33561 1804 115531
TOTAL 65 650 &5 650 0 1.22110 0,00000 0.51121 80185 0 33 561 1,804 115531
Note:
1. Monticello does not pay Fi...1 m.patiUes.
.
P..paml by adeta & AasoclMu,lnc:.
p",difl1lnary: For DtsC:U!J!Klon ~rpol.S ONLY
RockyMtn
7/2212005
Page 2 of 2
.
-JEHLERS
w-:::: I' ',::~::~:I:~ll:f.I.H'(t1<:tN'~
CITY OF MONTICELLO - ROCKY MOUNTAIN GROUP, LLC
Be.. Project Flaco' Captured . Soml-Annual State Admin. Seml-Annual Seml-Annua' PAYMENT DATE
PERIOD BEGINNING T.. Tax otspetitles Ta. Gross To. Audlt"r ot Net T.. Present Pl;R100 ENDING
Yrs. Mth. Yr. Caoacitv Cooacitv Reducticn Co".citv Increment 0.36% 10.00% Increment value Yrs. Mth. Yr.
0.0 02-01 2005 3,587 3,567 0.0 08-0' 2005
0.0 1J6.01 2005 3,587 3,567 0 Present Value Date - 6-ll1-ll5 0 0 0 0 0,0 02-01 2006
0.0 02-01 2006 3,587 3,587 0 0 0 0 0 0 0 0,0 06-01 2006
0.0 08-01 2006 3587 3567 0 0 0 0 0 0 0 0.0 02-0' 2007
0 62,063 37,693 (136) (3,776) 33,980 30,785
0,5 00-01 2007 3,587 65.650 0 62,063 37,693 (136) (3,776) 33,980 60,616 1.0 02,01 2000
1.0 02-01 2006 3,587 65,650 0 62,063 37,ll93 (136) (3,776) 33,960 90,120 1.5 06-01 2000
1.5 00-01 2006 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 116,706 2.0 02-01 2009
2.0 02-01 2009 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 146,596 2.5 00-01 2009
2.5 08-01 2009 3,587 65,650 0 62,063 37,ll93 (136) (3,776) 33,980 173,605 3.0 02-01 2010
3.0 02-01 2010 3,567 65,650 0 62,063 37,693 (136) (3,776) 33,980 200,350 3.5 00-01 2010
3.5 08-ll1 2010 3,567 65.650 0 62,063 37,693 (136) (3,776) 33,960 226,248 4.0 02-01 2011
4.0 02-01 2011 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,960 251,515 4.5 06-01 2011
4.5 06-01 2011 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,960 276,165 5.0 02-01 2012
5.0 02-ll1 2012 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 300,214 5.5 08-01 2012
5.5 06-01 2012 3,587 65,650 0 62,063 37,693 (136) (3,776) 33,980 323,676 6.0 02-01 2013
6.0 02-01 2013 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 346,566 6.5 06-01 2013
6.5 08-01 2013 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 366,898 7.0 02-01 2014
7.0 02-01 2014 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,980 390,685 7.5 06-01 2014
7.5 08-01 2014 3,587 65,650 0 62,063 37,893 (136) (3.776) 33,980 411,941 8.0 02-01 2015
8.0 02-<11 2015 3,587 65,650 0 62,063 37,893 (136) (3,776) 33,960 432,678 8.5 06-01 2015
8.5 08-01 2015 3587 65 650 0 62 063 37 893 i136\ m776i 33 980 452910 9.0 02-01 2016
Tot.ls: 662 065 " 455\ 167 9611 611649
Present Value Date - 8-01 -OS 517677 /1616\ /50 323 452 910
Note:
1. State AUditor payment is based on 1st haft; PilY 2005 actual and may increase over term of district
2. Assumes developmont is constroctod in 2005. asSl!ss.OO in 2006 and first increment is paid in 2007.
3. Amount of Increment will vary depending upon mar1<at value, tax rates, class rste<I, construction schedul.. and Inflation on marl<et valuo.
4. Inflation on to. nlles cannot bo captured - TAX RATES COULD O!"CUNE
5. TIF _s not copture stole wide property taxes or market value property t.....
6. IF INFLATIONARY TIF IS RECEIVED IN 2006, THE FINAL INCREMENT WILL BE 2/1/15.
.
How Tu Increment is Calculated
Total Property Tua
Id$ Stak Tn
1~!Il M.rket V.lue Tal:
I~ E:.:imnr TJU:~
AnnUli Tu Ine-rement Fi~lnciDE
Il5,53l
-33,561
-1,804
;;!,;!!!lI Eotimal<
7S~785 lell .DY .dmin. Fees
CUlfl!lnt MlIIrket: Value - Est.
New MarUl Vall,le ~ Est.
Dlfferenoo
Pre:sent Value of Tax Increment
Difference .
Value Uk. to Occur VYlUlout il!!lx Incl"ftrne1'l11S Less Than;
219,'.9
3 320 000
3,100,531
517 677
2,~82,85-4
2 ..2 864
.
Prepllrwc:l by Ehters & AssodatM,lne,
P,..lmin_ry: Far PillCu!IIIion PurpmiU oNL V
RockyMIn
.
.
.
APPENDIX E
MlNNESOTA BUSINESS ASSISTANCE FORM
(MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT)
Form to be added prior to the public hearing
APPENDIX
E-l
.
.
.
HRA Agenda - 08/16/05
5.
Public "earine: on the Business Subsidv Al!reement and Public "carin!! on the Sale of
Land. Consideration to adopt a resolution aDDrOvin!! Purchase and Redevelonment
Contract between the "RA in and for the Citv of Monticello and Roekv Mountain
Group. LLC.
A. Reference and backeround:
PUBLIC HEARING - BUSINESS SUBSIDY AGREEMENT
As the assistance to the redeveloper "Rocky Mountain Group LLC" exceeds $100,000, the
HRA must hold a public hearing according to the Minnesota Statutes, Section 116J.993-
116J.995. The public hearing notice appeared in the local newspaper on August 4,2005,
meeting the public notice requirements. The "Business Subsidy Agreement", is Section 3.8 of
the Purchase and Contract for Redevelopment by and between the HRA and Rocky Mountain
Group LLC. The Agreement describes the purpose and goals of the subsidy, remedies if goals
are not met, and reporting requirements.
OPEN THE PUBLIC HEARING FOR COMMENTS AND QUESTIONS - CLOSE TI IE
PUBLIC HEARING ON THE BUSINESS SUBSIDY AGREEMENT.
PUBLIC HEARING - SALE OF LAND
The City of Monticello established the Housing and Redevelopment Authority (I IRA) to carry
out the goals and objectives within Redevelopment Plan of Central Monticello Redevelopment
Project No. 01. The HRA can acquire and sale land for the purpose of economic,
redevelopment, and/or housing development. However, unlike the City of Monticello, the
HRA must hold a public hearing prior to sale ofland according to Minnesota Statutes. Said
public hearing notice appeared in the local newspaper on August 4, 2005, meeting the public
notice requirements.
Some time ago, the City Council approved to motion to deed the 35 acres of Otter Creek
Crossing to the HRA via a "quick claim deed". At the closing for the 35-acre parccl between
the City and John Chadwick in December 2004, the HRA and City each contributed
$500,000. The remaining 85 acres is under a Contract for Deed with principal and interest
payments beginning December 2005 in the amount of approximately $200,000 annually over
ten years. The rationale for the Council to deed the property to the HRA was to simplify and
consolidate the land sale and negotiation process (land write-down) to one governmental entity
for the benefit of the end-user. ARTICLE III of the Purchase and Contract for Redevelopment
.
HRA Agenda - 08/16/05
outlines the conveyance, purchase price, and conditions for the acquisition and conveyance of
the 8.64 acres to Rocky Mountain Group, LLC.
OPEN 'rr-IE PUBLIC IIEARING FOR COMMEN'rS AND OUESTIONS - CLOSE THE
PUBLIC HEARING ON THE SALE OF LAND.
PURCHASE AND CONTRACT FOR REDEVELOPMENT
The Purchase and Contract for Redevelopment by and between the HRA and Rocky Mountain
Group LLC was prepared by HRA Attorney Steve Bubul, Kennedy & Graven. Unlike
contracts of the past, this contract includes a quit claim deed for purposc of conveying property
to Rocky Mountain, an Interfund I,oan for advance of certain costs in connection with TIF
District No. 1-36, and an Assessment Agreement. The purchasc price represents the price as
established within the preferred package criteria at time of negotiations.
The Executive Director will highlight the main points for the Purchase and Contract at the
meeti ng.
B. Alternative Action:
.
1.
Motion to adopt a resolution approving thc Purchase and Redevelopment Contract
between the HRA in and fiJr the City of Monticello and Rocky Mountain Group, LLC.
2. Motion to deny adoption of the resolution approving thc Purchase and Redevelopment
Contract between the HRA in and for the City of Monticello and Rocky Mountain
Group, LLC.
3. A motion to table any action.
C. Recommendation:
The City Administrator and Executive Director recommend alternative no. 1 as the Contract is
consistent with the preferred packagc critcria and economic development goals for Ottcr Crcck
Crossing.
D. Sunnortine Oata:
Two public hcaring notices, resolution for adoption, and Purchasc and Redevelopment
Contract.
.
2
lITeu. "'1111 .. ~-.& l' "'.-
nsent Agenda which
d consideration of
yroll and receipts, wire
:s, personnel matters
~ fall sports coaching
The roster was com-
fiAexcept for the
. ~l Girls Soccer
lpening.
was the only board
~r not to approve of the
1. He objected mainly
;e he wasn't comfort.
Ipproving bills without
able to talk to Business
gel' Bill Holmgren, who
In vacation, because of
going issue with checks
atching up.
tel' in the meeting,
-intendent Jim Johnson
he board that he imple-
ed a new step in the
lval process for checks.
an employee of the dis-
must get initials at the
ram administrator level
re using the district's
ey.
eard a presentation by
die School Assistant
dpal Brad Sellner on the
~ren(.-e between class size
student to teacher ratio.
~pproved the elementary
le.ndbook presented
t board by Joe
.:ke ort, Linda Borger-
g, and Brad Sanderson.
.pproved, with.a 5-1 vote,
atteptance of donations
&3,665 from Wal~Mart to be
:d as the board sees fit,
650 from the Lions Club
Project 4 Teens, Wright
.unty Peer Helpers Cross-
lds, and TATU, $900 from
e . Lions Club for
lfnerstones, and $1,000
lm United Way for Middle
:hool Intramurals.
Wigen was the only board
ember to vote against the
----0-. LJ "
half-time kindergarten teacl1-
ers (one at Pine wood and one
at Little Mountain).
The ELL and Pinewood
positions were discussed last
month, but approvals were
pending on the state budget.
The district planned for a 4.5
percent increase, but received
four percent. .
However, Superintendent
Jim Johnson set aside
$100,000 of the district's
money in March for new posi-
tions which, after factoring in
categorical increases that had-
n't been included in the budg-
et, was more than enough to
add in the kindergarten posi-
tions.
Johnson also told the
board that he'd recently
learned that the district had
saved $20,000 on property
insurance for the upcoming
year.
. Heard Johnson speak about
the progress of the high
school tennis courts and the
Moose Sherritt Ice Arena.
The tennis courts won't be
ready for the start of the fall
season due to a draining issue
caused by the excess of clay
found in the surface. The ten-
nis season, which begins in
two weeks. will start at
Pinewood.
The ice arena is again
under construction after a
series of complications, and it'
is hoped to be finished by Oct.
1.
. Approved the scheduling of
the next three meetings.
A special board meeting
~as set for Aug. 15, 6.p.m., to
go over state funding with
Holmgren. An Ice Arena
Committee meeting was set
for Aug. 10 at 6:30 p.m., and a
regular School Board meeting
was set for Sept. 7 at 6 p.m.
All person InTere'Ht;U III "'~ -, _.. ._.~ .
comment on the request by the City. At the hearing, the (jOUnTY Dua'u ..."
hear all interested parties and shall consider all evidence offered..
Notice of the time and location of this hearing shall be given to all per-
sons interested by mail and by publication for three successive weeks.
-Robert J. Hiivala. Wright County Auditor / Treasurer
(July 28, Aug. 4. 11. 2005)
NOTICE OF PUBLIC HEARING
MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY
WRIGHT COUNTY, STATE OF MINNESOTA
NOTICE IS HEREBY GIVEN that the Housing and Redevelopment
Authority in and for the City of Monticello. Minnesota, will hold a public
hearing on August 16, 2005, at approximately 6:00 P.M. in the Bridge
Room, 505 Walnut Street. Monticello, Minnesota. regarding a proposed
business subsidy to be granted by the Housing and Redevelopment
Authority in and for the City of Monticello to Rocky Mountain Group L.L.C.
(the "Recipient") under Minnesota Statutes, Sections116J.993 through
116J.995. The proposed subsidy involves tax increment financing assis-
tance to facilitate development by the Recipient of a 54,000 sq. ft.
office/distribution center in the City of Monticello.
Information about the proposed business subsidy, including a summa.
ry of the terms of the subsidy and a copy of the draft business subsidy
agreement are available for inspection at City Hall during regular business
hours.
All interested persons may appear at the hearing and present their
views orally or prior to the meeting in writing. Written comments should be
addressed to: Executive Director, Monticello IRA. 505 Walnut Street,
Monticello, MN 55362.
-Ollie Koropchak, Executive Director of the Monticello Housing and
Redevelopment Authority
(Aug, 4, 2005)
*
NOTICE OF PUBLIC HEARING
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICEllO - COUNTY OF WRIGHT
STATE OF MINNESOTA
Sale of Land
NOTICE IS HEREBY GIVEN that the Housing and Redevelopment
Authority (the "Authority") in and for the City of Monticello, County of Wright.
State of Minnesota, will hold a public hearing Tuesday. August 16, 2005, at
approximately 6:00 p.m., at the Monticello Community Center, 505 Walnut
Street, Monticello, Minnesota, relating to the proposed sale of land located
within the Redevelopment Plan for Central Monticello Redevelopment
Project No.1 and the TIF Plan for TIF District No. 1-36.
The land proposed for sale is described as follows:
Description: Lot 1, Block 1, Otter Creek Crossing 1 st Addition, City of
Monticello, County of Wright.
-Ollie Koropchak, HRA Executive Director
(Aug. 4, 2005)
*'
, ,~ I
,"i".
SPECIAL MEETING NOTICE
. . OF THE .... .-
MONTICEllO ECONOMIC DEVELOPMENT AUTHORITY
TUESDAY, AUGUST 9, 2005, 4:00 P.M.
ACADEMY ROOM, 505 WALNUT STREET.
Subject:
1. Consideration to discuss for resolution the non-periormance date for
approved GMEF Loan No. 024 and the EDA loan position. Applicant:
Tapper's Holding, Inc.
2. Consideration to discuss the late payment policy and continued delin-
quent payment on GMEF Supplemental Loan No. 014. (Carl Bondhus, Eric
Bondhus, and Dennis Bondhus).
3. Other updates.
-Ollie Koropchak, Community Development Department
(Aug. 4, 2005)
....
h
n
e
Front DeskIHousekeeping
UQ'!ltpmmce Person
.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
RESOLUTION NO .
RESOLUTION APPROVING PURCHASE AND REDEVELOPMENT
CONTRACT BETWEEN THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF MONTICELLO AND ROCKY
MOUNTAIN GROUP, LtC.
BE IT RESOLVED by the Board of Commissioners ("Board") of the Housing and
Redevelopment Authority in and for the City of Monticello ("Authority") as follows:
Section 1. Recitals.
1.01. The Authority currently administers Central Monticcllo Redevelopment Project No.
I (the "Project"); and has on this date approved (and recommend approval by the City of) the
creation of Tax Increment Financing District No. 1-36 (the "TIF District") within the Project, all
pursuant to Minnesota Statutes, Sections 469.001 to 469.047 and Sections 469.174 to 469.179.
.
I .02. To facilitate redevelopment of certain propcrty in the TIF District, and Authority
proposes to enter into a Purchase and Redevelopment Contract (the "Contract") between the
Authority and Rocky Mountain Group, LLC (the "Redeveloper"), under which among other things
the Authority will convey certain property described as Lot 1, Block I, Otter Creek Crossing 1 st
Addition (the "Redevelopment Property") to Redeveloper.
1.03. The City currently owns the Redevelopment Propel1y and has previously authorized
the conveyance of that propel1y to the Authority in order to promote the development of the Otter
Creek Crossing industrial park.
1.04. The assistance under the Contract constitutes a "business subsidy" exceeding
$100,000 within the meaning of Minnesota Statutes, Section 116J.993 to 116J.995 (the "Business
Subsidy Act").
1.05. The "business subsidy agreement" as required under the Business Subsidy Act is
included as one section of the Contract, and the Authority has on this date conducted a duly noticed
public hearing regarding both the sale of the Redevelopment Property to Redeveloper and the
business subsidy agreement, at which all interested persons were give an opportunity to be heard.
Section 2. Authority Approval: Further Proceedings.
2.01. The Board approves the Contract as presented to the Board, including the business
subsidy agreement therein, su~ject to modifications that do not alter the substance of the transaction
and that are approved by the Chair and Executive Director, provided that (a) execution of the
documents by the those officials shall be conclusive evidence of their approval; and (b) approval
. and execution of the Contract is subject to City Council approval of the tax increment financing
SJB.266537vl
MNIlJO-121
plan for the TIF District and City Council approval of the business subsidy agreement, both of
. which are currently anticipated to occur on August 22,2005.
2.02. Authority staff and officials are authorized to take all actions necessary to perfoDl1
the Authority's obligations under the Contract as a whole, including without limitation execution of
any deed or other documents necessary to acquire the Redevelopment Property from the City and to
convey such property to Redeveloper.
Approved by the Board of Commissioners of the Housing and Redevelopment Authority in
and for the City of Monticello this day of 16th day of August, 2005.
Chair
A TrEST:
Executive Director
.
.
2
.
.
.
PURCHASE AND REDEVELOPMENT CONTRACT
By and Between
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO, MINNESOTA
and
ROCKY MOlJNT AIN GROUP, LLC
Dated as of:
, 2005
This document was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Hank Plaza
Minneapolis, Minnesota 55402
Telephone: 337-9300
.
.
.
TABLE OF CONTENTS
Page
PR.EAMBLE ............................................................................................................................. 1
Section 1.1.
Seetion 2.1.
Section 2.2.
Seetion 3. I .
Section 3.2.
Section 3.3.
Seetion 3.4.
Section 3.5.
Seetion 3.6.
Section 3.7.
Section 3.8
Section 3. <)
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 5.1 .
Section 5.2.
SJH-21>1>308v I
MNI'JO-121
ARTICLE I
Definitions
f)cfinitions........................................................................................................... 2
ARTICLE II
Reprcsentations and Warranties
Representations by the Authority........................................................................ 5
Representations and Warranties by the Redcvclopcr.......................................... 5
ARTICLE III
Acquisition and Conveyance of Property
Conveyance of the Property.............................................. ..................................7
Purchase Price; Provisions for Payment ............................................................. 7
Conditions of Conveyance ..... ................................. ........................... ...... ... ........7
Place of Document Execution, Delivery and Recording, Costs .........................8
'I'itle ..................................................................................................................... 8
Soil and Environmental Conditions ........................ ............................................ <)
Advance of Land and Other Costs; Tax Increment Interfund Loan ................... 9
Business S 1.1 bsid y Agreement............................................................................ 1 0
Payment of Administrative Costs ..................................................................... 12
ARTICLE IV
Construction of Minimum Improvements
Construction of Minimum Improvements ........................................................ 13
Construction Plans............................................................................................ 13
Commencement and Completion of Construction.......... ................... ............... 14
Certificate of Completion ............................ ................ ........ ............... .............. 14
ARTICLE V
Insurance
Insurance........................................................................................................... 16
Subordination.................................................................................................... 17
1
.
.
.
Section 6.1.
Section 6.2.
Section 6.3
Section 7.1.
Section 7.2.
Section 7.3.
Section 8.1.
Section 8.2.
Section 8.3.
Section 9.1.
Section 9.2.
Section 9.3.
Section 9.4.
Section 9.5.
Section 9.6.
Section 10.1.
Section 10.2.
Section ICU.
Section 10.4.
Section 10.5.
Section 10.6.
Section 10.7.
Section 10.g.
Scction 10.9
Section 10.10
'i.IB-2M308v I
MN190-121
ARTICLE VI
Delinquent Taxes and Review of Taxes
Right to Collect Delinquent Taxes.................................................................... 18
Review of Taxes............................................................................................... 1 g
Assessment Agrecment..................................................................................... 18
ARTICLE VII
Financing
Fi nancing........................................................................................................... 19
Authority's Option to Cure Del~lUlt on Mortgage............................................. 19
Subordination and Modification f()r the Benefit of Mortgagee ........................ 19
ARTICLE VIII
Prohibitions Against Assi!2:nment and Transfer: Indemnification
Representation as to Redevelopment ................................................................ 21
Prohibition Against Redeveloper's Transfer of Property and
Assignment of Agreement.................................................... ............... .............21
Releasc and Indemnification Covenants.... ............ ........... ................................ 22
ARTICLE IX
Events of DeJ~lUlt
Events of Default Defined .......................... ............... .......................................24
Remedies on Default......................................................................................... 24
Revesting Title in Authority Upon Happening of Event Subsequent to
Conveyance to Redeveloper............................................................................. 24
Resale of Reacquired Property; Disposition of Proceeds .................................26
No Remedy Exclusive....................................................................................... 26
No Additional Waiver Implied by One Waiver ................................................ 27
ARTICLE X
Additional Provisions
Conflict of Interests; Authority Representatives Not Individually I ,jable........ 2S
Equal Employment Opportunity ........................................................ ...............28
Restrictions on Use........................................................................................... 28
Provisions Not Merged With Deed.... ...................... ........... .............................. 2g
Titles of Articlcs and Sections .......................................................................... 28
Notices and Demands....................................................................................... 28
CounterpaI1s...................................................................................................... 29
Recording.......................................................................................................... 29
Amendment....................................................................................................... 29
A uthority or City Approvals. ............................ ............................ ....................29
11
.
.
.
Section 10.11
Section 10.12
Termination..................................... ......................................... .........................29
Choice of Law and Venue................................................................................. 29
TESTIM () NIl) M ....................................................................................................................... S-1
S I (J N A TlJ RE S . .. .. . . . . .. .. . . .. .. . .. . . . . .. .. . . . . . . .. .. . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . .. . . . . . .. . .. .. . . . . . .
. .. .. .. . . .. .. .. .. .. . . . . .. .. . . .. S-1
SCHEDULE A Description of Redevelopment Property
SCHEDULE B Form of Quit Claim Deed
SCIIEDULE C Resolution approving Interfund Loan
SCHEDULE D Certificate of Completion
SCHEDULE E Assessment Agreement
(The remainder of this page is intentionally left blank.)
SJR-266308y I
MN190-121
III
.
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PURCHASE AND REDEVELOPMENT CONTRACT
TillS AGREEMENT, made on or as of the day of . , 2005, by and
between HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF
MONTICELLO, MONTICELLO, MINNESOTA, a puhlic hody corporate and politic
established pursuant to Minnesota Statutes, Sections 469.001 to 469.047 (the "Authority"), and
ROCK Y MOUNTAIN GROUP, LLC, a Minnesota limited liability company (the
"Redeveloper").
WITNESSETH:
WIIFREAS, the Authority has undertaken a program to promote economic development
and job opportunities and to promote the redevelopment of land which is underutilized within the
City, and in this connection created a redevelopment project known as the Central Monticello
Redevelopment Project No. I (the "Redcvclopmcnt Projcct") pursuant to Minncsota Statutes,
Sections 469.0()1 to 469.047 (the "HRA Act"); and
WIIEREAS, pursuant to the HRA Act, the Authority is authorized to acquire real
property, or interests thercin, and to undertake certain activities to facilitate the redevelopment of
rcal property by private enterprise; and
WHEREAS, the Authority has acquired or will acquire certain property described in
Schedule A (the "Redevelopment Property") within the Redevelopment Project, and intends to
convey that property to the Redeveloper for development of certain improvements described
herein; and
WHEREAS, the Authority and City have approved a Tax Increment Financing Plan for
Tax Increment Financing District No. 1-36 (the "TIF District") pursuant to Minnesota Statutes,
Sections 469.174 to 469.179, made up of the Redevelopment Property; and
WHEREAS, the Authority believes that the redevelopment of the Redevelopment
Property pursuant to this Agreement, and fulfillment generally of this Agreement, are in the vital
and best interests of the City and the health, safety, morals, and welfare of its residents, and in
accord with the public purposes and provisions of the applicable State and local laws and
requirements under which the Project has been undertaken and is being assisted.
NOW, TI-IEREfORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them docs hereby covenant and agree with the other as tl)lIows:
(The remainder of this page is intentionally left blank.)
S.IB-26630Rv I
MN190-121
1
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ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Monticello, or any successor or assign.
"Authority Representative" means the Executive Director of the Authority, or any person
designated by the Exccutive Director to act as the Authority Representative for the purposes of
this Agreement.
"Business Subsidy Act" means Minnesota Statutes, Section 116.J. 993 to 1161.995, as
amended.
"Certificate of Completion" means the certification provided to the Redevelopcr, or the
purchaser of any part, parcel or unit of the Redevelopment Property, pursuant to Section 4.4 of
. this Agreement.
"City" means the City of Monticello, Minnesota.
"Closing" has the meaning provided in Section 3.3(b).
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment Property
which (a) shall bc as detailed as the plans, specifications, drawings and related documents which
are suhmitted to the appropriate building officials of the City, and (h) shall include at least the
following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) 1100r plan
for each t1oor; (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~ Minnesota.
"Event of Default" means an action by the Redeveloper listed III Article IX of this
Agreement.
.
"1 folder" means the owner of a MOligage.
S.lB-26630Xv I
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2
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"liRA Act" means Minnesota Statutes, Sections 469.001 to 469.047, as amended.
"lnterfund Loan" has the meaning provided in Section 3.7 and Schedule C.
"Minimum Improvements" means the construction on the Redevelopment Property of an
approximately 54,000 square foot warehouse and distribution facility, including office space
necessary for and related to such activities.
"Mortgage" means any mortgage made by the Redeveloper which is secured, in whole or
in part, with the Redevelopmcnt Property and which is a permitted encumbrance pursuant to the
provisions of Article VIII of this Agreement.
"Otter Creek Crossing Declaration" means the Declaration of Protective Covenants,
Conditions and Protections f(Jr Otter Creek Crossing filed February 17, 2005 in the Oflice of the
County Recorder for County, Minnesota as Document No. A 947485.
"Preliminary Agreement" means the Preliminary Development Agreement between thc
Authority and the Redeveloper dated as of July 18,2005.
"Redeveloper" means Rocky Mountain Group, I,LC or its permitted successors and
assIgns.
"Redevelopment Project" means the Authority's Central Minnesota Redevelopment
Project No. I.
"Redevelopment Property" means the real property described 111 Schedule A of this
Agreement.
"Redevelopment Plan" means the Authority's Redevelopment Plan for the
Redevelopment Project, as amended.
"State" means the State of Minnesota.
"Tax Incremcnt" means that portion of the real property taxes which is paid with respect
to the Redevelopment Property and which is remitted to the Authority as tax increment pursuant
to the Tax lncremcnt Act.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1799, as amended.
"Tax Increment District" or "TIF District" means the Authority's Tax Increment
Financing District No. 1-36.
"Tax Increment Plan" or "TIF Plan" means the Authority's Tax Increment Financing
Plan for Tax Increment Financing District No. ] -36, as approved by the Authority on August 16,
2005 and by the City on August 22, 2005, and as it may be amendcd from time to time.
sm-26630Rv I
MN190-121
3
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"Tax Official" means any County assessor; County auditor; County or State board of
el.}ualization, the commissioner of revenue of the State, or any State or federal district court, the
tax court of the State, or the State Supreme Court.
"Termination Date" means the earlier of (a) date of the Authority's last receipt of Tax
Increment from thc '1'1 F District, or (b) the date the Interfund I,oan has been paid in full,
defeased, or terminated in accordance with the terms of the resolution set f<')fth in Schedule C.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking
to be excused as a result thereof which are the direct result of war, terrorism, strikes, other labor
troubles, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of
any federal, state or local governmental unit (other than the Authority in exercising its rights
under this Agreemcnt) which directly result in delays. Unavoidable Delays shall not include
delays in the Redeveloper's obtaining of permits or governmental approvals necessary to enable
construction of the Minimum Improvements by the dates such approval and construction is
required undcr Sections 4.2 and 4.3 of this Agreement.
(The remainder of this page is intentionally left blank.)
SJIl-266308v 1
MN190-121
4
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ARTICLE 1I
Representations and Warranties
Section 2.1. Representations by the Authority. The Authority makes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a housing and redevelopment authority duly organized and
existing under the laws of the State. Under the provisions of the Act, the Authority has the
power to enter into this Agreement and carry out its obligations hereunder.
(b) The activities of the Authority are undertaken to f(Jster the redevelopment of
certain real property which for a variety of reasons is presently underutilized, to prevent the
emergence of blight, to create increased tax base and employment in the City, and to stimulate
further development of the Otter Creek Crossing industrial park and the Redevelopment Project
as a whole.
Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper is a limited liability company duly organized and in good
standing under the laws of the State, is not in violation of any provisions of its articles of
organization or the laws of the State, is duly authorized to transact business within the State, has
power to enter into this Agreement and has duly authorized the execution, delivery and
performance of this Agreement by proper action of its members.
(b) If the Redeveloper aCl.}uires the Redevelopment Property in accordance with this
Agreement, the Redeveloper will construct, operate and maintain the Minimum Improvements in
accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and
federal laws and regulations (including, but not limited to, environmental, zoning, building code
and public health laws and regulations).
(c) The Redeveloper has received no notice or communication from any local, state
or federal official that the activities of the Redeveloper or the Authority in the Project Area may
be or will be in violation of any environmental law or regulation (other than those notices or
communications of which the Authority is aware). The Redeveloper is aware of no facts the
existence of which would cause it to be in violation of or give any person a valid claim under any
local, state or federal environmental law, regulation or review procedure.
(d) The Redeveloper will construct the Minimum Improvements in accordance with
all local, state or federal energy-conservation laws or regulations.
(c) The Redeveloper will obtain, in a timely manner, all required permits, licenses
and approvals, and will meet, in a timely manner, all requirements of all applicable local, state
SJ B-266308v I
rv1N190-121
5
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.
and fcderal laws and regulations which must be obtained or met before the Minimum
Improvements may be lawfully constructed.
(f) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limitcd by or conflicts with or results in a breach ot~
the tcrms, conditions or provisions of any partnership or company restriction or any evidences of
indebtcdness, agreement or instrument of whatevcr nature to which the Redeveloper is now a
party or by which it is bound, or constitutes a dcfault under any of the foregoing.
(g) Thc proposed development by the Redeveloper hereunder would not occur but for
the tax increment financing assistance being provided by thc Authority hereunder.
(h) The Redeveloper is not currently in default under any business subsidy agrcement
with any grantor, as such terms are defined in the busincss Subsidy Act.
(The rcmainder of this page is intentionally left blank.)
SJH-266J08v I
MNllJO.121
G
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ARTICLE HI
Acquisition and Convevance of Property
Section 3.1. Conveyance of the Property. As of the date of this Agreement, the City owns
the Redevelopment Property and has agreed to transfer title to the Authority. The Authority will
convey title to and possession of the Redevelopment Property to the Redeveloper, subject to all the
terms and conditions of this Agreement. The parties agree and understand that this Agreement
supersedes in all respects the Preliminary Agreement.
Section 3.2. Purchase Price; Provisions for Payment. (a) 'The purchase price to be paid to
the Authority by the Redeveloper in exchange for the conveyance of the Redevelopment Property is
$549,095. The pal1ies agree and understand the purchasc pricc rcprescnts 217,800 square feet (five
acres) at a price of $.95 pcr square foot, and 159,156 square fect (3.65 acres) at a price of $2.15 per
square foot. The purchase price shall bc payable by the Redeveloper as f(Jllows:
(i) eamest money in the amount of $10,000, receipt of which the Authority
acknowledges upon execution in full of this Agreement; and
(ii) thc balancc payable in cash or certified check at Closing.
Section 3.3. Conditions of Conveyance. (a) The Authority shall convey title to and
possession of the Redevelopment Property to the Redeveloper by a deed substantially in the f()nn of
the deed attached as Schedule B to this Agreement. The Authority's obligation to convey the
Redevelopment Property to the Redeveloper is subjeet to satisfaction of the following terms and
conditions:
(I) The Authority having approved Construetion Plans tl1f the Minimum
Improvements in aecordance with Section 4.2.
(2) The Authority having approved financing f{H construction of the Minimum
Improvements in accordance with Article VII hereof~ and the Redeveloper having closed on
sueh pennanent financing at or before Closing on transfer of title to the Redevelopment
Property to the Redeveloper.
(3) The Redeveloper having reviewed and approved (or waived objections to)
title to the Redevelopment Property as set forth in Section 3.5.
(4) The Redeveloper having reviewed and approved (or waived objections to)
soil and environmental conditions as set f0l1h in Section 3.6.
(5) There is no uncured Event of Default under this Agreement.
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Conditions (I), (2), and (5) are solely for the benefit of the Authority, and may be waived by the
Authority. Conditions (3) and (4) arc solely for the benefit of the Redeveloper, and may be waived
by the Redeveloper.
(b) The closing on conveyance of the Redevelopment Property from the Authority to the
Redeveloper shall occur upon satisf~lCtion of the conditions specified in this Section, but no later
than ..~__, 2005 or at such earlier date as the parties hercto agree in writing ("Closing").
Section 3.4. Place of Document Execution, Delivery and Recording, Costs. (a) Unless
otherwise mutually agreed by the Authority and the Redeveloper, the execution and delivery of all
dceds, documents and the payment of any purchase price shall bc made at the offices of the
Authority or such other location to which the parties may agree.
(b) The deed shall be in recordable form and shall be promptly recorded in the proper
office for the recordation of deeds and other instruments pertaining to the Redevelopment
Property. At Closing, the Redeveloper shall pay: all recording costs, including state deed tax, in
connection with the conveyance of the Redevelopment Property; costs of recording any
instruments used to clear title encumbrances; title insurance commitment fees and premiums, if
any; and title company closing fees, if any; and a portion of City trunk fees in the amount of
$37,914. The parties agree and understand that the Redevelopment Property is exempt from
property taxes tlX taxes payable in 2005, and is expected to be exempt for taxes payable in 2006.
.
(c) At Closing the Authority shall payor cause to be paid all outstanding special
assessments against Redevelopment Property, all park dedication fees owed to the City pursuant to
City ordinances in connection with the Redevelopment Property, and all City trunk fees in excess of
the amount paid by Redevcloper under paragraph (b) above. The parties agree and understand that
all such costs are included in the purchase price payable under Section 3.2, except to the extent
otherwise described in Section 3.7.
Section 3.5. Title. (a) As soon as practicable after the date of this Agreement, the
Redeveloper shall obtain a commitment for the issuance of a policy of title fix the Redevelopment
Property. The Redeveloper shall have twenty (20) days from the date of its receipt of such
commitment to review the state of title to the Development Properiy and to provide the Authority
with a list of written objections to such title. Upon receipt of the Redeveloper's list of written
objections, the Authority shall proceed in good faith and with all due diligence to attempt to cure the
objcctions made by the Redeveloper. In the event that the Authority has failed to cure objections
within sixty (60) days after its receipt of the Redeveloper's list of such objections, the Redeveloper
may by the giving of written notice to the Authority (i) terminate this Agreement, upon the receipt
of which this Agreement shall be null and void and neither pat1y shall have any liability hereunder,
or (ii) waive the objections and proceed to Closing. Upon tel111ination, the Authority shall promptly
retUl11 to the Rcdeveloper any earnest money. The Authority shall have no obligation to take any
action to clear defects in the title to the Redevelopment Property, other than the good 1ltith efTorts
described above.
.
(b) The Authority shall take no actions to encumber title to the Redevelopment Property
between the date of this Agreement and the time the deed is delivered to the Redeveloper.
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(c) The Redeveloper shall take no actions to encumber title to the Redevclopment
Property between the date of this Agreement and the time the deed is delivered to the Redeveloper.
The Redeveloper expressly agrees that it will not cause or permit the attachment of any mechanics,
attorneys, or other liens to the Redevelopment Property prior to Closing. Notwithstanding
termination of this Agreement prior to Closing, Redeveloper is obligated to pay all costs to
discharge any encumbrances to the Redevelopment Property attributable to actions of Redeveloper,
its employees, officers, agents or consultants, including without limitation any architect, contractor
and or engineer.
Section 3.6. Soils, Environmental Conditions, Grading:. (a) BefolT closing on conveyance
of the Redevelopment Property from the Authority to the Redeveloper, the Redeveloper may enter
the Redevelopment Propelty and conduct any other environmental or soils studies deemed
necessary by the Redeveloper. If, at least 10 days before Closing the Redeveloper dctennines that
hazardous waste or other pollutants as defined under federal and state law exist on the property, or
that the soils arc othcrwise unsuitable for construction of the Minimum Improvements, the
Redcveloper may at its option terminate this Agrcement by giving written notice to the Authority,
upon receipt of which this Agreement shall be null and void and neither party shall have any
liability hereunder, except the Authority shall promptly return to the Redeveloper any earnest
money.
(b) Notwithstanding anything to the contrary hercin, the Authority will undertake (or
cause to be undertaken) General Grading of the Redevelopment Property at no additional cost to
Redeveloper (such cost being included in the purchase price under Section 3.2). For the purposes of
this Section, the term "General Grading" means general site grading according to a grading plan
prepared by Redeveloper and approved by the City, but excludes specific grading related to the
Minimum Improvements. The Authority in its sole discretion may undertake the General Grading
before Closing or within 30 days after Closing. If Gcneral Grading occurs after Closing,
Redeveloper gnmts Authority, its employees, contractors and agents a right of access to undertake
such work, or, if mutually agreed by the parties, Redeveloper may undertake such work. If
Redeveloper undertakes General Grading, the Authority will reimburse Redeveloper for such costs
up to a maximum of $ , within 30 days after receipt of a written request
accompanied by invoices, paid or payable, in a f0n11 reasonably satisfactory to Authority.
(c) The Redeveloper acknowledges that the Authority makes no representations or
warranties as to the condition of the soils on the Redevelopment Property or its fitness for
construction of the Minimum Improvements or any other purpose Jor which the Redeveloper may
make use of such propetty. 1'he Redeveloper further agrees that it will indemnify, defend, and hold
harn1less the Authority, the City, and their governing body members, otllcers, and employees, from
any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants on the
Redevclopment Property.
Section 3.7. Advance of Land and other Costs; Tax Increment Interfund Loan. (a) The
Authority has determined that the fair market price of the Redevelopment Property is $998,933,
or $2.65 per square foot. This price represents the total invested or to be invested by the
Authority or City in making the Redevelopment Property available Il.)!" commercial development,
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including the value of the raw land and all costs of special assessments for inti-astructure, City
trunk lees (except those paid by Redeveloper under Section 3.3), park dedication, general
grading, platting, administrative and holding costs. As described in Section 3.2 hereof, the
purchase price for conveyance of the Redevelopment Property represents a reduction ti-om the
(air market price from $2.65 per square loot to $.95 per square ll.)ot for a fi ve-acre portion of the
Redevelopment Property, and a reduction hom $2.65 per square foot to $2.15 per square foot for
a 3.65 acre portion of the Redevelopment Property. TherefiJre, at Closing the Authority will
forgo receipt the full market price of the Redevelopment Property, which represents an advance
of Authority funds in the amount of $449,838, less the amount paid by Redeveloper for City
trunk Ices in the amount 01'$37,914, for a net advance 01'$411,924.
(b) The Authority will treat the advance described in paragraph (a) as an interfund
loan (the "Interfund Loan") within the meaning of Section 469.178, Subdivision 7 of the TIP
Act. The total original principal amount of the Interfund Loan is $411,924. The terms of the
Interfund Loan are described in the resolution attached as Schedule C (the "Loan Resolution").
The Authority will pledge Available Tax Increment, as defined in the Loan Resolution, to
payment of the Interfund Loan. The Redeveloper has no rights or intercst in any Tax Increment.
Section 3.8. Business Subsidy Agreement. The provisions of this Section constitutc the
"business subsidy agreement" tor the purposes of the Business Subsidy Act.
(a) Ueneral Terms, The parties agrce and rcpresent to each other as fc)lIows:
.
(I) 'the subsidy providcd to the Redevcloper consists of the princi pal amount of the
Interfund Loan described in Section 3.7. The Interfund Loan is payable from a portion of
the Tax Increments 1i-om the TIF District, an cconomic development tax increment
financing district.
(2) The public purposes of the subsidy arc to L\cilitate development of the
Authority's industrial park, increase net jobs in the City and the State, and increase the tax
base of the City and the State.
(3) The goals for the subsidy aTe: to seeurc development of the Minimum
Improvements on the Redevelopment Property; to maintain such improvements as a
distribution facility for the time pcriod described in clause (6) below; and to creatc thc jobs
and wage levels in accordance with Section 3.8(b) hereof.
(4) If the goals described in clause (3) are not met, the Redeveloper must make the
payments to the Authority described in Section 3.8(c).
(5) The subsidy is nceded to induce Redeveloper to locate its business at this site,
and to mitigate the cost of assessments for public infrastructure, all as detel111ined by the
Authority upon approval of the TIF Plan.
(6) The Redeveloper must continue operation of the Minimum Improvements as a
"Qualified Facility" for at least live years after the Benefit Datc (defined hereinafter),
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subject to the continuing obligation described in Section 10.3 of this Agreement. For the
purposes of this Section, the tenn Qualified Facility means a distribution, warehouse or
manufacturing facility, including office space necessary for and related to those activities, all
within the meaning of Section 469.176, subd. 4c of the TIF Act. The improvements will be
a Qualified Facility as long as the Minimum Improvements are operated by Redeveloper or
a tenant for the aforementioned qualified uses. During any period when the Minimum
Improvements are vacant and not operated tor the aforementioned qualified uses, the
Minimum Improvements will not constitute a Qualified Facility.
(7) The Redeveloper does not have a parent corporation.
(8) The Redeveloper has not received, and does not expect to receive, financial
assistance from any other "grantor" as defined in the Business Subsidy Act, in connection
with the Development Property or the Minimum Improvements.
.
(b) Joh and Wage Goals, The "Benefit Date" of the assistance provided in this Agreelnent
is the earlier of the date of issuance of completion of the Minimum Improvements or the date the
Minimum Improvements are occupied by Redeveloper or a tenant of Redeveloper. Within two
years after the Benefit Date (the "Compliance Date"), the Redeveloper shall (i) retain at least 2S
full-time equivalent jobs pennanent to the Rcdevelopment Property from another location in the
City, (ii) cause the average hourly wage of the 28 retained jobs to be at least $20.21 per hour,
exclusive or benefits; (iii) cause to be created at least three new full-time permanent jobs on thc
Redevelopmcnt Property (above and beyond the 28 retained jobs); and (iv) cause the average hourly
wage of the three new jobs to be $19.90 per hour, exclusive of benefits. Jobs created by any tenants
within the Minimum Improvements will count toward the requirements of this Section.
Notwithstanding anything to the contrary herein, if the wage and job goals described in this
paragraph arc met by the Compliance Date, those goals are deemed satisficd despite the
Developer's continuing obligations under Sections 3.8(a)(6) and 3.8(d). The Authority may, aller a
public hearing, extend the Compliance Date by up to one year, provided that nothing in this section
will be construed to limit the Authority's legislative discretion rcgarding this matter.
(c) Remedies. If the Redeveloper fails to meet the goals described in Section 3.8(a)(3), the
Redeveloper shall repay to the Authority upon written demand from the Authority a "pro rata share"
of the to the Redeveloper together with interest on that amount at the implicit price deflator as
defined in Minnesota Statutes, Section 275.50, subd. 2, accrued from the date of substantial
completion of the Minin1Um Improvements to the date of payment. The term "pro rata share" means
percentages calculated as lollows:
(i) if the failure relates to the number of jobs, the jobs required less the jobs created,
divided by the jobs required;
(ii) if the failure relates to wages, the number of jobs required less the number of
jobs that meet the required wages, divided by the number of jobs required;
.
(iii) if the failure relates to maintenance of the facility as a Qualified Facility in
accordance with Section 3.8(a)(6), 60 lcss the number of months of operation as a Qualified
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Facility (where any month in which the Qualified Facility is in operation f()f at least 15 days
constitutes a month of operation), commencing on the Benefit Date and ending with the date
the Qualified Facility ceases operation as detennined by the Authority Representative,
divided by 60; and
(iv) if more than one of clauses (i) through (iij) apply, the sum of the applicable
percentages, not to exceed 100%.
Nothing in this Section shall be construed to limit the Authority's remedies under Article IX
hcreof. In addition to the rCllledy describcd in this Section and any other remedy available to the
Authority f()r failure to meet the goals stated in Section 3.8(a)(3), the Redeveloper agrees and
underst:mds that it may not a rcceive a busincss subsidy from the Authority or any grantor (as
defined in the Busincss Subsidy Act) for a period of five years from the datc of the failure or until
the Redevelopcr satisfies its repayment obligation under this Section, whichever occurs first.
.
(d) Reports. The Redcveloper must submit to the Authority a written report rcgarding
business subsidy goals and results by no later than February 1 of each year, commencing February
1,2006 and continuing until the latcr of (i) the date thc goals stated Section 3.8(a)(3) are met; (ii) 30
days after cxpiration ofthc period describcd in Section 3.8(a)(6); or (iii) if the goals arc not met, thc
date the subsidy is repaid in accordance with Section 3.8(c). The report must comply with Section
116.1.994, subdivision 7 ofthc Business Subsidy Act. The Authority will provide information to the
Redeveloper regarding the required f01ll1s. If the Redevcloper rails to timely file any report requircd
under this Section, the Authority will mail thc Redeveloper a waming within one week after the
required filing dale. If, aftcr 14 days ofthc postmarked date of the warning, the Redeveloper bils to
provide a report, the Rcdeveloper must pay to the Authority a penalty of $] 00 for cach subsequent
day until the report is filed. The maximum aggregate penalty payable under this Scction $1,000.
Section 3.9. Paymcnt of Administrativc Costs. The Authority acknowledges that upon
cxecution of the Preliminary Agreement, Redcvcloper has deposited with the Authority $10,000.
The Authority will use such deposit to pay "Administrative Costs," which tcrm means out ofpockct
costs incurrcd by the Authority and City together with staff costs of the Authority and City, all
attributable to or incurred in connection with the ncgotiation and preparation of the Preliminary
Agreement, this Agrecmcnt, the TIF Plan, and other documents and agreements in connection with
the developmcnt or the Redcvelopment Property. At Redeveloper's request, but no more often
than monthly, the Authority will provide Rcdcveloper with a writtcn report including invoices,
time sheets or other comparable evidence of cxpcnditures for Administrative Costs and the
outstanding balancc of funds deposited. If at any timc the Authority determincs that the deposit is
insufficient to pay Administrativc Costs, the Redevelopcr is obligated to pay such shortfall within
15 days after receipt of a written notice from the Authority containing evidence of the unpaid costs.
If any balancc of funds deposited remains upon issuance of the Cel1ificate or Completion pursuant
to Section 4.4 of this Agreemcnt, the Authority shall promptly return such balance to Redevelopcr;
provided that Redcveloper remains obligated to pay subscquent Administrativc Costs related to any
amendments to this Agreement requested by Rcdcveloper. Upon tcrmination of this Agreement in
accordancc with its terms, thc Redeveloper rcmains obligated undcr this section for Administrative
Costs incurrcd tlu'ough thc cffecti ve date of termination.
..
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Redeveloper agrees that it
will construct the Minimum Improvements on the Redevelopment Property in accordance with
the approved Construction Plans and will operate and maintain, preserve and keep the Minimum
Improvements or cause the Minimum Improvements to be maintained, preserved and kept with
the appurtenances and every part and parcel thereof, in good repair and condition.
Section 4.2. Construction Plans. (a) Before closing on conveyance of the
Redevelopment Property under Article III, the Redeveloper shall submit to the Authority
completed Construction Plans. The Construction Plans shall provide for the construction of the
Minimum Improvements and shall be in conf()rmity with the Otter Creek Crossing Declaration,
the Redevelopment Plan, the TIF Plan, this Agreement, and all applicable State and local laws
and regulations. The Authority will approve the Construction Plans in writing if: (i) the
Construction Plans eonf()[m to the terms and conditions of this Agreement; (ii) the Construction
Plans conform to the goals and objectives of the Otter Creek Crossing Declaration and the
Redevelopment Plan; (iii) the Construction Plans conform to all applicable federal, state and
local laws, ordinances, rules and regulations; (iv) the Construction Plans are adequate to provide
for construction of the Minimum Improvements; (v) the Construction Plans do not provide for
expenditures in excess of the funds available to the Redeveloper f()r construction of the
Minimum Improvements; and (vi) no Event of Default has occurred. No approval by the
Authority shall relieve the Redeveloper of the obligation to comply with the terms of this
Agreement or of the Redevelopment Plan, applicable federal, state and local laws, ordinances,
rules and regulations, or to construct the Minimum Improvements in accordance therewith. No
approval by the Authority shaIl constitute a waiver of an Event of Default. If approval of the
Construction Plans is requested by the Redeveloper in writing at the time of submission, such
Construction Plans shall be deemed approved unless rejected in writing by the Authority, in
whole or in part. Such rejections shall set forth in detai I the reasons therefore, and shall be made
within 30 days after the date of their receipt by the Authority. If the Authority rejects any
Construction Plans in whole or in part, the Redeveloper shall submit new or corrected
Construction Plans within 30 days after written notification to the Redeveloper of the rejection.
The provisions of this Section relating to approval, rejection and resubmission of corrected
Construction Plans shall continue to apply until the Construction Plans have been approved by
the Authority. Thc Authority's approval shaIl 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 satisfi.tetion
with the provisions of this Agreement relating thereto.
(c) If the Redeveloper desires to make any material change in the Construction Plans
after their approval by the Authority, the Redeveloper shall submit the proposed change to the
Authority for its approval. If the Construction Plans, as modified by the proposed change,
conform to the requiremcnts of this Section 4.2 of this Agreement with respect to such
previously approved Construction Plans, the Authority shall approve the proposed change and
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notify the Redeveloper 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
notiee by the Authority to the Redeveloper, setting forth in detail the reasons therefor. Such
rejection shall be made within ten (10) days after receipt of the notice of such change. cfhe
Authority's approval of any such change in the Construction Plans will not be unreasonably
withheld.
Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable
Delays, the Redeveloper must commence construction of the Minimum Improvements by no
later than 30 days after Closing on conveyance of the Redevelopment Property. Subject to
Unavoidable Delays, the Redeveloper must substantially complete construction of the Minimum
Improvements by December 31, 2005. All work with respect to the Minimum Improvements to
be constructed or provided by the Redeveloper on the Redevelopment Property shall be in
conformity with the Construction Plans as submitted by the Redeveloper and approved by the
Authority.
.
The Redeveloper agrees for itself~ its suceessors and assigns, and every successor in
interest to the Redevelopment Propeliy, or any part thereof~ that the Redeveloper, and such
successors and assigns, shall promptly begin and diligently prosecute to completion the
redevelopment of the Redevelopment Property through the construction of the Minimum
Improvements thereon, and that sueh construction shall in any event be commenced and
completed within the period specified in this Section 4.3 of this Agreement. Subsequent to
conveyance of the Redevelopment Property, or any part thereof, to the Redeveloper, and until
construction of the Minimum Improvements has been completed, the Redeveloper shall make
reports, in such detail and at such times as may reasonably be requested by the Authority, as to
the actual progress of the Redeveloper with respect to such construction.
Section 4.4. Certificate of Completion. (a) Promptly after substantial completion of the
Minimum Improvements in accordance with those provisions of the Agreement relating solely to
the obligations of the Redeveloper to construct the Minimum Improvements (including the dates
for beginning and completion thereof), the Authority will furnish the Redeveloper with a
Certificate of Completion in substantially the form provided in Schedule D.. Such certification
by the Authority shall be (and it shall be so provided in the deed and in the certification itself) a
conclusive determination of satisf~lCtion and termination of the agreements and covenants in the
Agreement and in the deed with respect to the obligations of the Redeveloper, and its successors
and assigns, to construct the Minimum Improvements and the dates for the beginning and
completion thereof. Such certillcation and such determination shall not constitute eviclence of
compliance with or satisfaction of any obligation of the Redeveloper to any Holder of a
Mortgage, or any insurer of a Mortgage, securing money loaned to finance the Minimum
Improvements, or any part thereof.
.
(b) The certificate provided for in this Section 4.4 of this Agreement shall be in such
form as will enahle it to be recorded in the proper office for the recordation of deeds and other
instruments pertaining to the Redevelopment Property. I f the Authority shall refuse or fail to
provide any certification in accordance with the provisions of this Section 4.4 of this Agreement,
the Authority shall, within thirty (30) days after written request by the Redeveloper, provide the
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Redeveloper with a written statement, indicating in adequate detail in what respects the
Redeveloper has Ltiled to complete the Minimum Improvements in accordance with the
provisions of the Agreement, or is othcrwise in default, and what measures or acts it will be
necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to
obtain such certification.
(c) The construction of the Minimum Improvements shall be deemed to be
commenced upon beginning of excavation for the building, and shall be deemed to be
substantially completed when thc Redeveloper has received a certificate of occupancy issued by
the City for the Minimum Improvements.
(The remainder of this page is intentionally lelt blank.)
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ARTICLE V
Insurance
Section 5.1. Insurance. The Redeveloper will provide and maintain at all times during
the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurancc
Policy and, from time to time during that period, at the request of the Authority, furnish the
Authority with proof of paYlnent of premiums on policies covering the following:
(i) Builder's risk insurance, written on the so-called "Builder's Risk --
Completed Value Basis," in an amount equal to one hundred percent (100%) of the
insurable value of the Minimum Improvements at the date of completion, and with
coverage available in nonreporting form on the so-called "all risk" form of policy. The
interest of the Authority shall be protected in accordance with a clause in form and
content satisfactory to the Authority;
(ii) Comprehensive general liability insurance (including operations,
contingent liability, operations of subcontractors, completed operations and contractual
liability insurance) together with an Owner's Contractor's Policy with limits against
bodily injury and property damage of not less than $1,000,000 for each occurrence (to
accomplish the above-required limits, an umbrella excess liability policy may be used);
and
(iii) Workers' compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and
expense, and from time to time at the request of the Authority shall fumish proof of the payment of
premiums on, insurance as follows:
(i)
a policy or
businesses.
Insurance against loss and/or dmnage to the Minimum Improvements under
policies covering such risks as are ordinarily insured against by similar
(ii) Comprehensive 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 OCCUlTenee and for each year of $1 ,OOO,()OO, and
shall he endorsed to show the City and Authority as additional insureds.
(iii) Such other insurance, including workers' compensation insurance respecting
all employees of the Redeveloper, in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Redeveloper may be self-insured with respect to all or any part of its liability for
workers' compensation.
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(c) All insurance required in Article V of this Agreement shaIl be taken out and
maintained in responsible insurance companies selected by the Redeveloper that are authorized
undcr the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will
deposit annually with the Authority policies evidencing all such insurance, or a certificate or
cel1iticates or binders of the respective insurers stating that such insurance is in tiJrce 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 Rcdeveloper and the
Authority at least 30 days before the cancellation or modification becomes effective. In lieu of
separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a
combination thereot~ having the coverage required herein, in which event the Redeveloper shall
deposit with the Authority a certificate or certificates of the respective insurers as to the amount of
coverage in force upon the Minimum Improvements.
......
(d) The Redeveloper agrees to notify the Authority immediately in the case of damage
exceeding $100,000 in amount to, or destruction of~ the Minimum Improvenlents or any p0l1ion
thereof resulting from fire or other casualty. In such event the Redeveloper will f()11hwith repair,
reconstruct, and restore the Minimum Improvements to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the extent necessary
to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net
proceeds of any insurance relating to such damage received by the Redeveloper to the payment or
reimbursement of the costs thereof.
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The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum
Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for
such purposes are suHicient to pay for the same. Any net proceeds remaining after completion of
such repairs, construction, and restoration shall be the property of the Redeveloper.
(e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this
Section, the Redeveloper shaIl have the option of paying to the Authority an amount that, in the
opinion of the Authority mld its fiscal consultant, is sufficient to pay in hili the outstanding principal
and accrued interest on the Intcrfund Loan.
(t) The Redeveloper and the Authority agree that all of the insurance provisions set
forth in this Article V shall terminate upon the termination of this Agreement.
Section 5.2. Suhordination. 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 Vll of this Agreement.
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ARTICLE VI
Delinquent Taxes and Review of Taxes
Section 6.1. Right to Collect Delinquent Taxes. Redeveloper agrees for itself, its
Successors and assigns, in addition to the obligation pursuant to statute to pay real estate taxes,
that it is also obligated by reason of this Agreement to pay before delinquency all real estate
taxes assessed against the Redevelopment Property and the Minimum Improvements. The
Redeveloper acknowledges that this obligation creates a contractual right on behalf of the
Authority through the Termination Date to sue the Redeveloper or its successors and assigns to
collect delinquent real estate taxes and any penalty or interest thereon and to pay over the same
as a tax payment to the county auditor. In any such suit, the Authority shall also be entitled to
recover its costs, expenses and reasonable attorney fees.
Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Termination
Date it will not cause a reduction in the real property taxes paid in respect of the Redevelopment
Property through: (a) willful destruction of the Redevelopment Property or any part thereof; or
(b) willful refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this
Agreement, except as otherwise provided in Section 5.1(e). The Redeveloper also agrees that it
wi II not, prior to the Termination Date, apply for a deferral of property tax on the Redevelopment
Property pursuant to any law, or transfer or permit transfer of the Redevelopment Property to any
entity whose owncrship or operation of the property would result in the Redevelopment Property
being cxempt from real estate taxes under State law (other than any portion thereof dedicated or
eonveyed to thc City or Authority in accordance with this Agreement).
Section 6.3. Assessment Agreement. (a) Upon closing on conveyance of the
Redevelopment Property to the Redeveloper under AI1icle JII hereot~ the Redeveloper shall, with
the Authority, execute an Assessment Agreement pursuant to Minnesota Statutes, Section 469.177,
subd. 8, specifying an assessor's minimum Market Value for the Redevelopment Property ,md
Minimum Improvemcnts constructed thereon. The arnount of the minimum Market Value shall be
$2,900,000 as of January 2, 2006 and each January 2 thercafter, notwithstand.ing the status of
construction by such dates.
(b) The Asscssment Agreement shall be substantially in the foml attached hereto as
Schedule E. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market valuc to the property in excess of such assessor's minimum Market Value. The
Assessment Agreement shall remain in 10rce /(Jr the period specified in the Assessment Agreement.
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obligation to subordinatc is contingent on the Authority's approval of the financing in
accordance with Section 7.1 hereof, and (c) in no event will the Authority subordinate its rights
under the Assessment Agreement described in Section 6.3.
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ARTICLE VIII
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Prohibitions A2ainst Assil!nment and Transfer; Indemnification
Section 8.1. Representation as to Redevelopment. The Redeveloper represents and
agrees that its purchase of the Redevelopment Property or portions thereol~ and its other
undertakings pursuant to the Agreement, are, and will be used, for the purpose of redevelopment
of the Redevelopment Property and not for speculation in land holding.
Section 8.2. Prohibition Against Rcdeveloper's Transfer of Propeliy and Assignment of
Agreement. The Redeveloper represents and agrees that until the Telmination Date:
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(a) Except only by way of seeurity for, and only 1()f, the purpose of obtaining
llnancing necessary to enable the Redeveloper or any suecessor in interest to the Redevelopment
Property, or any part thereof, to perform its obligations with respect to making the Minimum
Improvements under this Agreement, and any other purpose authorized by this Agreement, the
Redeveloper has not made or created and will not make or create or suffer to be made or created
any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in
any other mode or form of or with respect to the Agreement or the Redevelopment Property or
any part thereof or any interest therein, or any contract or agreement to do any of the same,
without the prior written approval of the Authority unless the Redeveloper remains liable and
bound by this Redevelopment Agreement in which event the Authority's approval is not
required. Any such transfer shall be subject to the provisions of this Agreement.
Notwithstanding anything to the contrary herein, the Authority consents to any assignment or
transfer by Redeveloper to Commercial Partners Exchange Company, LLC and/or its nOlninee
Rocky Mountain l':xchange Holding Company 25254, LLC. The Authority further agrees that
the permitted assignee of Redeveloper may, upon execution of this Agreement, substitute or
replace the deposit made under the Preliminary Agreement in the same amount as deposited by
Redeveloper and Authority will promptly deliver the deposit made by Redeveloper to Rocky
Mountain Group, LLC.
(b) In the event the Redeveloper, upon transfer or assignment of the Redevelopment
Property or any portion thereot~ seeks to be released from its obligations under this
Redevelopment Agreement as to the portions of the Redevelopment Property that is transferred
or assigned, the Authority and City shall be entitled to require, except as otherwise provided in
the Agreement, as conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority and City, necessary and
adequate to fulfill the obligations undertaken in this Agreement by the Redeveloper as to
the portion of the Redevelopment Property to be transferred.
.
(ii) Any proposed transferee, by instrument in wntll1g satisfactory to the
Authority and in fiJrt11 recordable among the land records, shall, for itself and its
successors and assigns, and expressly for the benefit of the Authority and City, have
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expressly assumed all of the obligations of the Redeveloper under this Agreemcnt as to
the portion of the Redevelopment Property to be transferred and agreed to be subject to
all the conditions and restrictions to which the Redeveloper is subject as to such portion;
provided, however, that the fact that any transCeree of. or any other successor in interest
whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever
rcason, havc assumed such obligations or so agreed, and shall not (unless and only to the
extcnt othcrwise specillcally provided in this Agreement or agreed to in writing by the
Authority and the City) deprive the Authority and or City of any rights or remedics or
controls with respect to the Redevelopment Property or any part thereof or the
construction of the Minimum Improvements; it being the intent of the parties as
expresscd in this Agreement that (to the fullest extent permitted at law and in equity and
cxcepting only in the manner and to the extent specifically provided otherwise in this
Agreement) no transfcr of~ or change with respect to, ownership in the Redevelopment
Property or any part thereof, or any intcrcst thercin, howcvcr consummatcd or occurring,
and whether voluntary or involuntary, shall operate, legally or practically, to deprivc or
limit the Authority of or with respect to any rights or remedies on controls provided in or
rcsulting from this Agreement with respect to the Minimum Improvements that the
Authority would havc had, had thcrc been no such transfer or change. In thc absence of
specific written agrccmcnt by the Authority and the City to the contrary, no such transfer
or approval by the Authority and the City thereof shall be deemed to relieve the
Redeveloper, or any other party bound in any way by this Agreement or otherwise with
respect to the construction of the Minimum Improvelnents, from any of its obligations
with respect thercto.
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(iii) Any and all instruments and other legal documents involved in effecting
thc transfcr of any interest in this Agreement or the Redevelopment Property governed by
this Article VIII, shall bc in a ft)rm reasonably satisfactory to thc Authority and the City.
In the event the foregoing conditions are satisfied thcn the Rcdeveloper shall be released from its
obligation under this Agreement, as to the portion 01' the Redevelopment Property that is
transferred, assigned or othcrwise convcycd.
Section 8.3. Relcasc and Indemnification Covenants. (a) The Redevcloper rcleases from
and covenants and agrces that the Authority and thc City and thc governing body members,
officcrs, agents, servants and employees thereof shall not be liable fell' and agrees to indemnify
and hold harmless the Authority and the City and the governing body members, officers, agents,
servants and employces thcreof against any loss or damagc to property or any injury to or dcath
of any person occurring at or about or resulting from any defect in thc Minimum Improvements.
(b) Except for any willful misreprescntation or any willful or wanton misconduct of
the following namcd parties, the Redeveloper agrees to protect and dcfcnd thc Authority and thc
City and the govcrning body members, officers, agents, servants and employees thereof, now or
f()[cver, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or
other procccding whatsoever by any person or entity whatsoever arising or purportedly arising
from this Agreement, or the transactions contemplated hereby or the acquisition, construction,
. installation, ownership, and opcration of the Minimum Improvcmcnts.
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(c) The Authority and the City and the governing body members, officers, agents,
servants and employees thereof shall not be liable for any damage or injury to thc persons or
property of the Redevelopcr or its ollicers, agents, servants or employees or any other person
who may be about the Redevelopment Property or Minimum Improvemcnts due to any act of
ncgligencc of any person.
(d) All covenants, stipulations, promiscs, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority in the individual capacity thereof.
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ARTICLE IX
I<~vents of Default
Section 9.1. Events of Dcfault Dcfined. The following shall be "Events of Default"
under this Agreemcnt and the term "L':vent of Default" shall mean, whenevcr it is used in this
Agreement (unless the context otherwisc provides), any f~tilure by any party to observe or
perform any other covcnant, condition, obligation or agreemcnt on its part to be observed or
performed under this Agreement or undcr any other agreement entered into between the
Redeveloper and the Authority or City in connection with development of the Redevelopment
Property.
Section 9.2. Rernedics on Default. Whenever any Event of Default referrcd to in Section
9.1 of this Agrcement occurs, thc non-defaulting party may excreise its rights under this Section
9.2 after providing thirty days written notice to the delaulting party of the Event of DelllUlt, but
only if the Event of Def~H1lt has not been cured within said thirty days or, if the Event of Debult
is by its nature incurable within thirty days, the debulting party does not provide assurances
reasonably satistactory to the non-del~H1lting party that the Event or Default will be cured and
will be cured as soon as reasonably possible;
(a) Suspend its performance under the Agreement until it receives assurances that the
deli.ullting paliy will cure its default and continue its performance under the Agreement.
(b) Cancel and rescind or terminate the Agreement.
(c) Take whatever action, ineluding legal, equitable or administrative action, which
may appear necessary or desirable to collect any payments due under this Agreement, or to
enforce performance and observance of any obligation, agreement, or covenant under this
Agreement.
(d) Notwithstanding anything to the contrary herein, in the case of defaults by
Redeveloper described in Section 3.8, the Authority has the additional remedies specified
therein, subject to the qualification describcd in Section 10.3.
Scction 9.3. Revesting Title in Authority Upon HapDening or Event SUbSe(lUent to
Conveyance to Rcdeveloper. In the event that subsequent to conveyance of thc Redevelopment
Property to the Redeveloper and prior to receipt by the Redeveloper of the Celiificate of Completion
for the Minimum Improvements required to be constructed on that parcel:
(a) the Redeveloper, subject to Unavoidable Dclays, shall fail to begin construction of
the Mininl1.un hnprovements in confonnity with this Agreement and such failure to begin
construction is not cured within 90 days alter written noticc from the Authority to the Redeveloper
to do so; or
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(b) subject to Unavoidable Delays, the Redeveloper after commencement of the
construction of the Minimum Improvements, fails to carry out its obligations with respect to the
construction of such improvements (ineluding the nature and the date for the completion thereot), or
abandons or substantially suspends construction work, and any such failure, abandorunent, or
suspension shall not be cured, ended, or remedied within 90 days after written demand from the
Authority to the Redeveloper to do so; or
(c) the Redeveloper fails to pay real estate taxes or assessments on the parcel or any pat1
thereof when due, or creates, suffers, assumes, or agrees to any encumbrance or lien on the parcel
(except to the extent permitted by this Agreement), or shall sutler any levy or attachment to be
made, or any materialmen's or mechanics' lien, or any other unauthorized encumbrance or lien to
attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed
or discharged or provision satistactory to the Authority made lor such payment, removal, or
discharge, within thirty (30) days after written demand by the Authority to do so; provided, that if
the Rcdeveloper first notifies the Authority of its intention to do so, it may in good faith contest any
mechanics' or other lien filed or established and in such event the Authority shall pellnit such
mechanics' or other lien to remain undischarged and unsatisfied during the period of such contest
and any appeal and during the course of such contest the Redeveloper shall keep the Authority
informed respecting the status of such defense; or
.
(d) there is, in violation of the Agreement, any transfer of the parcel or any pari thercof~
or any change in the ownership or distribution thereof of the Redeveloper, or with rcspect to the
identity of the parties in control of the Redeveloper or the degree thereot~ and such violation is not
cured within sixty (60) days after written dcmand by the Authority to the Redeveloper, or if the
event is by its nature incurable within 30 days, the Redeveloper does not, within such 30-day period,
provide assurances reasonably satisfactory to the Authority that the event will be cured as soon as
reasonably possible; or
(e) the Redeveloper fails to comply with any of its other covenants under this
Agreement related to the subject component of the Minimum Improvements and fails to cure any
such noncompliance or breach within thirty (30) days after written demand from thc Authority to
the Redeveloper to do so, or if the event is by its nature incurable within 30 days, the Redeveloper
docs not, within such ]O-day period, provide assurances reasonably satisfactory to the Authority that
the event will be cured as soon as reasonably possible; or
(f) the Holder of any Mortgage secured by the subject property exercises any remedy
provided by thc Mortgage documcnts or exercises any remedy provided by law or equity in the
event of a default in any of the terms or conditions of the Mortgage,
Then the Authority shall have the right to re-cnter and take possession of the parcel and to
terminate (and revest in the Authority) the estate conveyed by the deed to the Redeveloper, it being
the intent of this provision, together with other provisions of the Agreement, that the conveyance of
the parcel to the Redeveloper shall be made upon, and that the deed shall contain a condition
subsequent to the etrcct that in the event of any default on the part of the Redeveloper and failure on
the pal1 of the Redeveloper to remedy, end, or abrogate such default within the period and in the
. manncr stated in such subdivisions, the Authority at its option may declare a termination in favor of
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the Authority of the title, and of all the rights and interests in and to the parcel conveyed to the
Redeveloper, and that such title and all rights and interests of the Redeveloper, and any assigns or
successors in interest to and in the parcel, shall revert to the Authority, but only if the events stated
in Section 9.4(aHf) have not been cured within the time periods provided above.
Section 9.4. Resale of Reacquired Property; Disposition of Proceeds. Upon the rcvesting in
the Authority of title to and/or possession of the parccl or any part thereof as provided in Section
9.3, the Authority shall, pursuant to its responsibilities under law, use its best cff0l1s to sell the
parcel or pm1 thereof as soon and in such matmer as the Authority shall find feasible and consistent
with the o~jectives of such law and of the Redevelopment Plan and TIF Plan to a qualified and
responsible par1y or parties (as detellllined by the Authority) who will assume the obligation of
making or completing the Minimum Improvements or such other improvements in their stead as
shall be satisf~lctory to the Authority in accordance with the uses specified fi:>r such parcel or pm1
thereor in the Redevelopment Plan and Tlf Plan. During any time while the Authority has title to
and/or possession of a parccl obtained by revel1er, the Authority will not disturb the rights of any
tenants under any leases encumbering such parcel. Upon resale or the parcel, the proceeds thercof
shall he applied:
(a) first to reimburse the Authority for all costs and expenses incurred by them,
including but not limited to salaries of personnel. in connection with the recapture, management,
and resale of the parcel (but less any income derived by the Authority irom the property or part
thereof in connection with such management); all taxes, assessments, and water and sewer charges
with respect to thc parcel or part thereof (or, in the event the parcel is exempt from taxation or
assessment or such charge during the period of ownership thereof by the Authority, an amount, if
paid, eqlwl to such taxes, assessments, or charges (as determined by the Authority assessing official)
as would have hcen payahle if the parcel were not so exempt); any payments made or necessary to
be made to discharge any encumbrances or liens existing on the parcel or paI1 thereof at the time of
revesting of title thereto in the Authority or to discharge or prevent from attaching or being made
any subsequent encumbrances or liens due to ohligations, de1~mlts or acts of the Redeveloper, its
successors or transJerees; any expenditures made or obligations incurred with respect to the making
or completion of the subject improvements or any part thereof on the parcel or part thereof; and any
amounts otherwise owing thc Authority by the Redeveloper and its successor or transferee; and
(b) Second, to reimburse the Redeveloper, its SUCCcssor or transferee, up to the
amount equal to (1) the purchase price paid by Redeveloper under Section 3.2; plus (2) the
amount actually invested hy it in making any of the subject improvements on the parcel or part
thereot~ less (2) any gains or income withdrawn or made by it from the Agreement or the parcel.
Any balance remaining after such reimbursements shall be retained by the Authority as its property.
Section 9.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or Redeveloper is intended to be exclusivc 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 hy statute.
No delay or omission to exercisc 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
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may be exercised from time to timc and as often as may be deemed expedient In order to entitle
the Authority to exercise any rcmedy reserved to it, it shall not be necessary to give notice, other
than such notice as may be required in this Article IX.
Section 9.6. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thercafter waived by the
other party, such waiver shall be limited to the particular breach so waived and shall not be
deelned to waive any othcr concurrent, previous or subscquent breach hereunder.
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ARTICLE X
Additional Provisions
Section 10.1. Con11ict of Interests; Authority Representatives Not Individually Liable.
The Authority and thc Redeveloper, to the best of their respective knowledge, represent and
agree that no member, official, or employee of the Authority shall have any personal interest,
dircet or indirect, in the Agreement, nor shall any such member, official, or employee participate
in any decision rclating to the Agreement which affects his personal interests or the intcrests of
any corporation, partnership, or association in which he is, directly or indirectly, interested. No
member, orJicial, or employee of the Authority shall be personally liable to the Redeveloper, or
any successor in interest, in the evcnt of any default or breach by the Authority or County or for
any amount which may become due to the Redeveloper or successor or on any obligations under
the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum lmprovcments
provided for in the Agreement it will comply with all applicable federal, state and local equal
employment and non-discrimination laws and regulations.
.....
Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Termination
Date, the Redeveloper, and such successors and assigns, shall use the Redevelopment Property
and the Minimum Improvements thereon only as Qualified Facility (as defined in Section 3.8
hereof), provided that after expiration of the five-year period described in Section 3.8(c), the
repayment remedy described in Section 3.8(d) may not be imposed on Redeveloper for deIault
under this Seetion, and Authority is limited to any other remedies available under Article IX
hereof. Further, until the Termination Date the Redeveloper shall not discriminate upon the basis
of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy
of the Redevelopment Property or any improvements erected or to be erected thereon, or any part
thereof.
......
Section 10.4. Provisions Not Merged With Deed. None of the proVISions of this
Agreement are intended to or shall be merged by reason of any deed transferring any interest in
the Redevelopment Property and any such deed shall not be deemed to aIlect or impair the
provisions and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be
disregarded in construing or interpreting any of its provisions.
Section 10.6. Notjccs and Demands. Exeept as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to
the other shall be sufficicntly given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally; and
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(a) in the case of the Redeveloper, is addressed to or delivered personally to the
Rcdeveloper at Rocky Mountain Group, LLC, PO Box 336, Monticello, MN 55362, Attn:
Gregory Dahlheimer; and
(b) in the case of the Authority, is addressed to or delivercd personally to the
Authority at Housing and Redevelopment Authority in and for the City of Monticello, 505 Walnut
Street, Suite 1, Monticello, Minnesota 55337, Attn: Executive Director; or at such other address
with respect to either such party as that patiy may, from time to time, designate in writing and
f(Jrward to the other as provided in this Section.
Section 10.7. Counterparts. This Agreement may be executed lI1 any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any
amendments thereto with the County recorder. The Redeveloper shall pay all costs for
recording.
Section 10.9. Amendment. This Agreement may be amended only by written agrccmcnt
approved by the Authority and the Rcdcvc1opcr.
Scction 10.10. Authority or City Approvals. Unless otherwisc specified, any approval
required by the Authority under this Agreement may be given by the Authority Representative.
Section 10.11. Tcrmination. This Agreement tenninates on the Termination Date.
Section 10.12. Choice of Law and Venue. This Agreement shall be governed by and
construed in accordancc with the laws of the state of Minnesota. Any disputes, controversies, or
claims arising out of this Agreement shall bc heard in the statc or fcderal cOUlis of Minnesota, and
all parties to this Agreement waive any objection to the jurisdiction of thesc courts, whether bascd
on convenience or otherwise.
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IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused
this Agreement to be duly executed in its name and behalf on or as of the date first above written.
MONTICELLO ECONOMIC
DEVELOPMEN'T AUTHORITY
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The f(Jregoing instrument was acknowledged hefore me this _ day of
2005, by_ and , the Chair and Executive Director of the
Housing and Redevelopment Authority in and for the City of Monticello, a public body politic
and corporate, on behalf of the Authority.
Notary Public
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ROCK Y MOUNTAIN GROUP, LLC
By
Its
STATE OF _____)
) SS.
COUNTY OF ___ )
The foregoing instrument was acknowledged before me this __ day of
----, 2005 by _ ____ _, the____ of Rocky Mountain
Group, LLC, a Minnesota limited liability company, on behalf of the company.
Notary Public
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SCHEDULE A
REDEVELOPMENT PROPERTY
Lot I, Hlock 1, Ottcr Creek Crossing 1 st Addition, according to thc recorded plat thercof,
Wright County, Minnesota
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SCHEDULE B
FORM OF QUIT CLAIM DEED
THIS INDENTURE, between thc Housing and Rcdevelopment Authority in and for the
City of Monticello, Montieello, Minnesota, a public body corporate and politic (the "Grantor"), and
Rocky Mountain Group, LL-,C, a Minnesota limited liability company, (the "Grantee").
WITNESSETI I, that Grantor, in consideration of the sum of $_ __ _ and other
good and valuable consideration the receipt whereof is hereby acknowledged, does hereby grant,
bargain, quitclaim and convey to the Grantee, its successors and assigns forever, all the tract or
parcel of land lying and being in the County of and State of Minnesota dcscribed as follows, to-wit
(such tract or parcel of IEmd is hereinafter refened to as the "Property"):
I _ot I, I3Iock 1, Otter Creek Crossing I sf Addition, according to the recorded plat thelToe
Wright County, Minnesota
To have and to hold the same, together with all the hereditaments and appLll1enances
thereunto belonging.
SECTION 1.
.
It is understood and agreed that this Deed is subject to the covenants, conditions, restrictions
and provisions of an agreement recorded herewith entered into between the Grantor and Grantee on
the ___ day of, 2005, identified as "Purchase and Redevelopment Contract" (hereafter
reLened to as the "Agreement") and that thc Grantee shall not convey this Property, or any part
thereof, except as permitted by the Agreement until a cel1ificate of completion releasing the Grantee
1[om certain obligations of said Agreemcnt as to this Property or such part thercof thcn to be
conveyed, has been placed of record. This provision, however, shall in no way prevent the Grantee
from m0l1gaging this Property in order to obtain funds for the purchase of the Property hereby
conveyed or for erecting the Minimum Improvements thcreon (as defined in the Agreement) in
conformity with the Agreement, any applicable development program and applicable provisions of
the zoning ordinance of the City of Monticello, Minnesota, or for the refinancing of the same.
It is specifieally agreed that the Grantee shall promptly begin and diligently prosecute to
completion the redevelopment of the Property through the construction of the Minimum
Improvements thereon, as provided in the Agreement.
Promptly after completion of the Minimum Improvements in accordanee with the provisions
of the Agreement, the Grantor will furnish the Grantee with an appropriate instrument so certifying.
Such certification by the Grantor shall be (and it shall bc so provided in the certification itself) a
conclusive determination of satisfaction and termination of the agreements and covenants of the
Agreement and of this Deed with respect to the obligation of the Grantee, and its successors and
assigns, to construct the Minimum Improvements and the dates for the beginning and completion
~ thereof. Such cel1ification and sLlch determination shall not constitute evidence of compliance with
~ or satisfaction of any obligation of the Grantee to any holder of a mortgage, or any insurer of a
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mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the
Minimum Improvements, or any part thereof.
All certifications provided for herein shall be in such form as will enable them to be
recorded with the County Recorder, or Registrar of Titles, County, Minnesota. If the Grantor shall
refuse or fail to provide any such certification in accordance with the provisions of the Agreement
and this Deed, the Grantor shall, within thirty (30) days after written request by the Grantee, provide
the Grantee with a written statement indicating in adequate detail in what respects the Grantee has
failed to complete the Minimum Improvements in accordance with the provisions of the Agreement
or is otherwise in deJllLllt, and what measures or acts it will be necessary, in the opinion of the
Grantor, for the Grantee to take or perJ(mn in order to obtain such certification.
SECTION 2.
The Grantee's rights and interest in the Property are subject to the terms and conditions of
Section 9.3 of the Agreement relating to the Grantor's right to re-enter and revest in Grantor title to
the Propelty under conditions specified therein, including but not limited to termination of such
right upon issuance of a Certificate of Completion as defined in the Agreement.
SECTION 3.
.
The Grantee agrees for itself and its successors and assigns to or of the Property or any part
thereoC hereinbef()re deseribed, that the Grantee and such successors and assigns shall comply with
all provisions of the Agreement that relate to the Property or use thereof for the periods specified in
the Agreement, including without limitation the covenant set f()rth in Section I OJ thereof.
It is intended and agreed that the above and foregoing agreements and covenants shall be
covenants running with the land for the rcspective tenns herein provided, and that they shall, in any
event, and without regard to technical classification or designation, legal or otherwise, and except
only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by
law and equity for the benefit and in favor of: and enforceable by, the Grantor against the Grantee,
its successors and assigns, and every successor in interest to the Property, or any part thereof or any
interest therein, and any party in possession or occupancy of the Propcrty or any part thcreof.
.
In amplification, and not in restriction oJ: the provisions of the preceding section, It IS
i ntcnded and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants
provided herein, both 1()r and in its own right, and also for the purposes of protecting the interest of
the community and the other patties, public or private, in whose favor or for whose benefit thcse
agreements and covenants have been provided. Such agreements and covenants shall run in favor
of the (irantor without regard to whether the Grantor has at any time been, remains, or is an owner
of any land or interest therein to, or in favor of which such agreements and covenants relate. The
Grantor shall have the right, in the event of any breach of any such agreement or covenant to
exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or
any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall
not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed
on grounds of Grantee's Llilure to comply with its obligations under this Section 3.
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SECTION 4.
This Deed is also given subject to:
(a) Provision of the ordinances, building and zoning laws of the City of
Monticello, and state and federal laws and regulations in so far as they alIect this real estate.
(b) Declaration of Protective Covenants, Conditions and Protections for Otter
Creek Crossing filed February 17, 2005 in the Office of the County Recorder for County,
Minnesota as Document No. A 947485.
(b) [Others]
Grantor celiifies that it does not know of any wells on the Property.
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IN WITNESS WHEREOf, the (irantor has caused this Deed to be duly executed in its
behalf by its Chair and Executive Director and has caused its corporate seal to be hereunto affixed
this day of.._.". ,2005.
MONTICELLO ECONOMIC
DEVFIDPMENT AUTHORITY
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF )
-.
- On this__ day of , 2005, before Ine, a notary public within and for County,
personally appeared and to me personally known who by me
duly sworn, did say that they arc the Chair and Executive Director of the Housing and
Rcdevcloplnent Authority in and for the City of Monticello, Monticello, Minnesota (the
"Authority") named in the f()fcgoing instrument; that the seal afJixed to said instrument is the seal of
said Authority; that said instrument was signed and sealed on behalf of said Authority pursuant to a
resolution of its governing body; and said and acknowledged
said instrument to be the lree act and deed of said Authority.
Notary Public
This instnunent was drafted by:
Kennedy & Graven, Chartered
470 US Bank Plaza
Minneapolis, Milmesota 55402
.a
WI'
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mortgage, securing money loaned to finance the purchase of the Property hereby conveyed or the
Minimum Improvements, or any part thereof.
All certifications provided for herein shall be in such fom1 as will enable them to be
recorded with the County Recorder, or Registrar of Titles, County, Minnesota. If the Grantor shall
rcfuse or fail to provide any such certification in accordance with the provisions of the Agreement
and this Deed, the Grantor shall, within thirty (30) days after writtcn request by the Grantee, provide
the Grantee with a written statement indicating in adequate detail in what respects the Grantee has
failed to complete the Minimum Improvements in accordance with the provisions of the Agreement
or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the
Grantor, for the Grantee to take or perform in order to obtain such certification.
SECTION 2.
The Grantee's rights and interest in the Property are subject to the terms and conditions of
Section 9.3 ofthe Agreement relating to the Grantor's right to re-enter and revest in Grantor title to
the Property under conditions specified therein, including but not limited to telmination of such
right upon issuance of a Cel1ificate of Completion as delined in the Agreement.
SECTION 3.
.
The Urantee agrees for itself and its successors and assigns to or of the Property or any part
thereof. hereinbetl)fe described, that the Grantee and such successors and assigns shall comply with
all provisions of the Agreement that relate to the Property or use thereof for the periods specified in
the Agreement, including without limitation the covenant set forth in Section 10.3 thereof.
It is intended and agreed that the above and foregoing agreements and covenants shall be
covenants running with the land for the respective terms herein provided, and that they shall, in any
event, and without regard to teclmieal classification or designation, legal or otherwise, and except
only as otherwise specifically provided in this Deed, be binding, to the fullest extent permitted by
law and equity for the benefit and in favor of, and enforceable by, the Grantor against the Grantee,
its successors and assigns, and every successor in interest to the Property, or any part thereof or any
interest therein, and any party in possession or occupancy of the Propel1y or any part thereof.
.
In amplification, and not in restriction of, the provisions of the preceding section, it is
intended and agreed that the Grantor shall be deemed a beneficiary of the agreements and covenants
provided herein, both f()r and in its own right, and also for the purposes of protecting the interest of
the community and the other parties, public or private, in whose favor or tt))" whose benefit these
agreements and covenants have been provided. Such agreements and covenants shall nm in favor
of the Grantor without regard to whether the Grantor has at any time been, remains, or is ,ill owner
of any land or interest therein to, or in favor ot~ which such agreements and covenants relate. The
Grantor shall have the right, in the event of any breach of any such agreement or covenant to
exercise all the rights and remedies, and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breach of agreement or covenant, to which it or
any other beneficiaries of such agreement or covenant may be entitled; provided that Grantor shall
not have any right to re-enter the Property or revest in the Grantor the estate conveyed by this Deed
on grounds of Grantee's failure to comply with its obligations under this Section 3.
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SECTION 4,
This Deed is also given subject to:
(a) Provision of the ordinances, building and zoning laws of the City of
Monticello, and state and federal laws and regulations in so far as they affect this real estate,
(b) Declaration of Protective Covenants, Conditions and Protections flJr Otter
Creek Crossing filed February 17, 2005 in the Office of the County Recorder f()r County,
Minnesota as Document No. A 947485.
(b) [Others]
Grantor certifies that it does not know of any wells on the Property.
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SCHEDULE C
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
RESOLUTION NO.
AUTHORIZING INTER FUND LOAN FOR
ADVANCE OF CERTAIIN COSTS
IN CONNECTION WITH TAX INCREMENT
fINANCING DISTRICT NO. I ~36
BE IT RESOLVED By the Board Of Commissioners of the Housing and Redevelopment
Authority in and for the City of Monticello, Minnesota (the "Authority") as f()lIows:
Section 1.
Background.
1.0 I. Thc Authority has established tax increment financing district no. 1-36 (the "TIf<
District") within the Central Monticello Redevelopment Project No. I (the "Redevelopment
Project") pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") and
. Sections 469.00 I to 469.047 (the "liRA Act").
1.02. The Authority may incur certain costs related to the TIF District, which costs may
be financed on a temporary basis from available Authority funds.
1.03. Under Scction 469.178, Subdivision 7 of thc TIF Act, the Authority is authorized
to advance or loan moncy from any fund from which such advances may be legally made in
ordcr to financc cxpenditurcs that are eligible to be paid with tax incremcnts undcr the TIF Act.
1.04. Thc Authority owns or will acquire ccrtain property (the "Redevelopmcnt
Property") and has incurred or will incur certain costs to preparc such property f(n
redevelopment. The Authority has determined that the markct price of thc improved
Redcvelopment Property is at least $998,933, or $2.65 per squarc foot.
1.05. The Authority proposes to enter into a Purchasc and Rcdevelopment Contract (the
"Contract") with Rocky Mountain Group LLC (the "Redeveloper"), under which thc Authority
will (among other things) convey the Rcdevelopment Property to the Rcdevelopcr for a purchase
price of $549,095, subject to Redevelopcr's obligation to pay a portion of City trunk fees in the
amount of $37,914.
.
1.06. I3y conveying the Redevelopmcnt Property under thc Contract, at Closing the
Authority will forgo receipt the full market price of the Redevelopment Property. Such
f()rbearance represents an advance of Authority funds in the amount of $411,924 (the write-down
in purchase price net of Redevelopcr's trunk. fee payment).
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1.08. The Authority intends to designate such land advanee and fee payments as an
interfund loan in accordance with the terms of this rcsolution and the TIF Act.
Section 2.
Repayment of Interfund Loan.
2.01. The Authority will reimburse itself f()r the in the principal amount of $411,924
together with interest at the rate of 4% per annum (the "lnterfund Loan"). I nterest accrues on the
principal amount 11-om the date of Closing on conveyance of the Redevelopment Property to the
Redeveloper under the Development Agreemcnt (hereafter, the "Closing Date"). The interest
rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75
and Section 549.09, both in ef1ect for calendar year 2005. The interest rate will, without further
action by the Authority, be adjusted on January 1 of each year to reflect the greater of the rate
specilied under Minnesota Statutes, Section 270.75 and Section 549.09 in effect for that calendar
year.
2.02. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first
Payment Date on which the Authority has Available Tax Increment (defIned below), or on any
other dates determined by the City Administrator, through the date of last receipt of tax
increment from the TIF District.
.
2.03. Payments on the Interfund Loan will be made solely from Available Tax
Increment, defined as tax increment from the TIt" District received by the Authority from County
in the six-month period before any Payment Date, less any amounts dctermined by the Authority
to be applied toward administrative expenses in accordance with the TIF Act. Payments shall be
applied first to accrued interest, and then to unpaid principal. Interest accruing from the Closing
Date will be compounded senliannually on February 1 and August 1 of cach year and added to
principal until the first Payment Date, unless otherwise spccified by thc City Administrator.
2.04. The principal sum and all accrued interest payable under this resolution is pre-
payable in whole or in part at any time by the Authority without premium or penalty.
2.05. This resolution is evidence of an internal borrowing by the Authority in
accordance with Section 469.178, subdivision 7 of the TIF Act, and is a limited obligation
payable solely from A vailablc Tax Incrcment pledgcd to the payment hereof under this
resolution. The I nterfund Loan shall not be deemed to constitute a general obligation of the State
of Minnesota or any political subdivision thereoC including, without limitation, the Authority
and the City. Neither the State of Minnesota, nor any political subdivision thereof shall be
obligated to pay the principal of or interest on the Interfund Loan or other costs incident hereto
except out of Available Tax Increment. The Authority shall have no obligation to pay any
principal amount of the Interfund Loan or accrued interest thereon, which may remain unpaid
after the final Payment Date.
.
2.06. The Authority may at any time make a determination to forgive the outstanding
principal amount and accrued interest on the Interfund Loan to the extent permissible under law.
2'()7. The Authority may from time to time amend the terms of this Resolution to the
extent permitted by law, including without limitation amendment to the payment schedule and
8.1 B-26630Xv 1
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the interest rate; provided that the interest rate may not be increased above the maXllllum
. specified in Section 469.178. subd. 7 of the TIF Act.
Section 3. Effective Date. This resolution is effective upon execution in full of the
Contract.
Adopted this.
. day of _________
,2005
Chair
ATTEST:
Executive Director
.
.
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SCHEDULE D
CERTIFICATE OF COMPLETION
WHEREAS, the I lousing and Redevelopment Authority in and for the City of Monticello,
Minnesota, a public body, corporate and politic (the "Grantor"), by a Deed recorded in the OfTice of
the County Recorder or the Rcgistrar of Titles in and for the County or and State of Minnesota, as
Deed Document Number(s) ____ and ___, respectively, has conveyed to
_ ._ (the "Grantee"), the tl)llowing described land in County of Wright and State of
Minncsota, to-wit:
and
WIIEREAS. said Deed contained certain covenants and restrictions sct forth in Sections
I and 2 of said Deed; and
WI I EREAS, said Grantee has performed said covenants and conditions insofar as it is
able in a manner dcemed sutlicient by the Grantor to permit the execution and recording of this
celiification;
NOW, THEREFORE, this is to certify that all building construction and othcr physical
improvements specified to be done and made by the Grantce have been completed and the above
covenants and conditions in said Deed and the agreements and covenants in Article IV of the
Agreement (as described in said Deed) have been performed by the Grantee therein, and the
County Recordcr or the Registrar of Titles in and for the County or and State of Minnesota is
hereby authorized to accept for recording and to record, the filing of this instrument, to be a
conclusive determination of the satisfactory termination of the covenants and conditions of
Article IV of the, but the covenants created by Sections 3 and 4 of said Deed shall remain in full
force and effect.
Dated:
,20
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND fOR TI IE CITY OF
MONTICELLO, MINNESOTA
By
Authority Representative
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SCHEDULE E
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTU'ICATION
By and Between
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
and
ROCKY MOUNTAIN GROUP, LLC
This Document was dratted by:
K!':NNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
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ASSESSMENT AGREEMENT
.
THIS AGREEMENT, made on or as of the _~ day of __---.--' 2005, and
between the Housing and Redevelopment Authority in and for the City of Monticello, a public body
corporate and politic (the "Authority") and Rocky Mountain Group, LLC, a Minnesota limited
liability company (the "Redeveloper").
WITNESSFrH, that
WIIEREAS, on or before the date hereof the Authority and the Redeveloper have entered
into a Purchase and Redevelopment Agreement dated ___, 2005 (the "Redevelopment
Contract"), pursuant to which the Authority is to facilitate development of certain property in the
City of Monticello hereinafter referred to as the "Property" and legally described in Exhibit A
hereto; and
WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to
construct certain improvements upon the Property (the "Minimum Improvements"); and
WHEREAS, the Authority and the Redeveloper desire to establish a minimum market value
for the Property and the townhouses constructed thereon, pursuant to Minnesota Statutes, Section
469.177, Subdivision 8; and
.
WIIEREAS, the Authority and the Assessor f()r the County (the "Assessor") have reviewed
the preliminary plans and specifications for the townhouses and have inspected such improvements;
NOW, TIIEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as f()llows:
1. The minimum market value which shall be assessed for the Property described in
Exhibit A, together with the Minimum Improvements thereon, for ad valorem tax purposes, shall be
$2,900,000 as of January 2, 2006 and each January 2 thereafter notwithstanding the progress of
construction of such Minimum Improvements by such dates.
2. The minimum market value herein established shall be of no further force and effect
and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the
Authority of the final payment from the County of Tax Increments from Tlf District No. 1-36; or
(b) The date when the Interfund Loan (as defined in the Redevelopment Contract) has been paid in
full, de1eased or terminated in accordance with the resolution set forth in Schedule C of the
Redevelopment Contract.
The event referred to in Sections 2(b) ofthis Agreement shall be evidenced by a certificate
or a11idavit executed by the Authority.
.
3. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
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thcy be construcd as, modifying the tem1S of the Redevelopmcnt Contract between the Authority
. and the Rcdeveloper.
5. This Agreement shall inure to the benefit of and bc binding upon the successors and
assigns of the parties.
6. I-':ach of the parties has authority to enter into this Agreement and to take all actions
required of it, and has taken all actions nccessary to authorize the execution and delivery of this
Agreement.
7. In the cvent any provision of this Agreement shall be held invalid and unenf(Jrceablc
by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable
any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute, acknowledge and
delivcr, or cause to be executed, acknowlcdged and dclivered, such supplcments, amendments and
modifications hcreto, and such further instruments as may reasonably bc required for correcting any
inadequate, or incolTect, or amended description of the Property or the townhouse thereon, or for
calTying out thc cxpressed intcntion of this Agreement, including, without limitation, any further
instruments required to delete from the description of the Property such pm1 or parts as may bc
included within a separate asscssment agrcement.
.
9. Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its tcrms modified except by a writing authorized and executed by all parties
hereto.
10. This Agreement may be simult"meously executcd in sevcral counterparts, each of
which shall be an original and all of which shall constitutc but one and the same instrumcnt.
11. This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
.
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HOUSING AND REDEVELOPMENT
CITY OF MONTICELLO, MINN[~SOTA
By
Its Chair
By
Its Executive Director
STATE OF MINNESOTA
SS.
COUNTY OF )
The foregoing instrument was acknowledged befl1fe me this _ day of ,2005 by
and , the Chair and Executive Director
of the Housing and Redevelopment Authority in and for the City of Monticello, Milmesota, on
behalf of the Authority.
Notary Public
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ROCKY MOUNTAIN GROUP, LLC
By
Its
STATE OF MINNESOTA )
) SS.
COUNTY OF )
The llwegoing instrument was acknowledged before me this_ day of __ ....-
2005 hy _.....___._, the _.._.__ of Rocky Mountain Group, LLC, a
Minnesota limited liability company, on hehalf of the limited liability company.
Notary Puhlic
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CERTIFICATION BY COIJNTY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the land
and improvements are reasonable.
County Assessor for the County of Wright
STATE OF MINNESUTA )
) ss
COUnI'Y OF WRIGI IT )
The foregoing instrument was acknowledged before me this _ day of __
2005 by ___ ____, the County Assessor ofthe County of Wright.
Notary Public
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EXHIBIT A of ASSESSMENT AGREEMENT
Legal Description of Property
Lot I, Block 1, Otter Creek Crossing 1 st Addition, according to the recorded plat thereof,
Wright County, Milmesota
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HRA Agenda - 08/16/05
6.
Considcration to discuss first draft of the Contract for Private Redevelopment
between thc HRA and Master's Fifth Avenue.
A. Reference and backf!round:
At the July 18, 2005, HRA meeting the commissioners made a motion to hire the firm of Pope
Architects for inspeetion services with the redeveloper paying full cost subject to the
acceptance by the HRA Attorney. The motion included: Should the HRA Attorney not accept
Pope Architect and in lieu of timing, LHB would be hired. Pope Architect was hired for reason
of cost savings and at the request of the redeveloper.
The I-IRA Attorney reviewed the Pope proposal of July 22 and BubuI agreed to train and try
Pope Architect. I talked to Skip Sorensen who was receptive to the training at the 0111cc of
Kcnnedy & Graven, this at the cxpense of the redevelopcr. On July 29, 2005, Fluth informed
me that Pope Architect was not intcrested or didn't have the time; therefore, Fluth gave the go-
ahead to hire LHB. By this time, LHI3's schedule allowed them to do the inspection the end of
August with a completed report to the HRA at their meeting in Scptember and the Council,
Septembcr 12. Thereforc, the public hearing callcd by the Council for August 22, 2005, will be
opened and continued to September 12. The Planning Commission and OAT tabled their
action because of an incomplete set of plans, they will considcr action on September 6. I was
informed by LHB that an opening came up and they may do the Monticello inspection the week
of August 15.
Both Kennedy & Graven and LHB have informed me that it is more difficult to qualify houses
than commercial buildings as structurally substandard. LHI3 mentioned that if a project does
not qualify for a redevelopment district (25 years), they do consider a rencwal and renovation
district (15 years.)
Secondly, Fluth has inquircd as to moving the one house prior to the approval of the report and
establishment of the district Septcmber 12. lIe would like to close on the lot proposed as its
new location, middle to late August which may be prior to the inspection. Ifhe starts the
project prior to approval, this poses the question: Would the project move forward without the
assistance of TIF? We are looking into the option of the district only including two parcels not
three. If the 11,000 sq ft retail center is completely constructed on the two lots, this is where
the tax increment is generated and qualified expenditures would include the acquisition and
demolition of the two homes provided they were acquired after the date of Preliminary
Development Agreement, September 14,2004.
The first draft of the Contract is based on the TIF Cashtlows by Ehlers & Associates, project
HRA Agenda - 08/16/05
.
cost analysis by the redeveloper based on three parcels, and discussions with the I IRA
president. Ehlers used a $90 per square foot market value for the 11,000 sq n retail center at
a 6.5% interest rate. The estimated amount of tax increment generated over 25 years is
$172,000 N PY. The finance method suggested is pay-as-you-go. The cost analysis providcd
by the developer which includes the expenses to acquire and demolish three homes shows a
9.72% rate of return and $165,000 ofTIF assistance. The first draft of the Contract offers
$150,000 at 6.5% of pay-as-you-go TIF assistance. This for I I RA consideration. It is
suggested that the TIF assistance be used for acquisition and demolition costs. This assumes a
qualifIed redevelopment district and three parcels.
Should the district be reduced to two parccls then the TIF analysis needs to be re-done to
reflect the revised uses and sources for "but for" test as well as revised Cashflows. Should the
district become a renewal and renovation district, the TIF Cashflows need to be re-run.
The first drait was prepared because past experience indicates extended negotiation time for an
agreement to be reached between the redeveloper and the HRA.
.
-fhe liRA should give some direction. The Contract will be on the September 7 agenda for
approval, along with the TIf plan and inspection report approval, and removal of certain
parcels from TIF Oistrict No. 1-22.
Supportim! Data:
TIF Cashflows, redeveloper's cost analysis, and concept plan.
.
2
7/21/2005 P.ge 1 or 2
.. ~.~.~~,~,~
.
Barry Fluth
CITY OF MONTICELLO - Landmark Square II
11,000 sq/fl Commercial Space - TIF District 1.35
-- -I
Dislrict Type New Rodevelopment District
District Number 1-35
Inflation Rate - Every Veer 0.0000%
Pay-As-Vou-Go Inle.....1 Rate 6.5000%
Note Issued Date (Present Value Date) 01-Aug-06
Local Tax Rate-Moximum 122.1100% Pay 2005
Fiscal Disparities Election (A-inside or B-outoide) N/A
V..ar District was certified Pay 2006
Assumes Firsl Tax IncIllment For District 2008
Vear District was modified NJA
Development located In modified area No
Assumes First Tax lnerement for Project 2008
Veers of Tax Increment 26
Assumes Last Vear of Tax lneremenl 2033
Fiscal Disparities Ratio
Fiscal Dispantles Metro Wide Tax Rate
Local Tax Rate - Current
State Wide Property Tox Rate (used to< 10101 taxes)
Market Value Tax Rate (used for total taxes)
0.0000%
0.0000%
122.1100% Pay 2005
51.1210% Pay 2005
0.0544% Pay 2005
Commercial Industrial Class Rate
First 150,000
Over 150,000
Rental aass Rate
Resldental Class Rate
First 500,000
Over 500,000
1.500/.-2.00%
1.50%
2.00%
1.25%
1.00%-1.25%
1.00%
1.25%
~
"'......w
.
Class Rate Aller
Property Land BuildIng Total Class Bas.. After Conversion Dale
MaplD PID OWner Market Value Market Value Market Value Rale Ta. CaoacllV Conversion Ta. Cao'clty P.v.nle
1 155-01Q.036011 Bal'fyFluth 35,000 81,200 116,200 1.00%-1,25% 1,162 1.50%-2.00% 1,743 2006
2 155-010-036010 Mat.. ~Inh Awlne 35,000 84,100 119,100 1.00%-1.25% 1,191 1.50%-2.00% 1,787 2006
3 155-01Q.038030 .""",... 31.000 86 200 119,200 1.000/.-1.25% 1,192 1.5Q%..2.00% 1788 2006
Totals 354 500 3645 5318
Total Market. Value Ta""a Per Total Market Class Project Vear Date
Phase Ua.. So. F1./Unlts SQ. F1./Unil5 So. FI./Units Ta_ Value Rate T.. Capacity Conalrucled Pavable
1 Commerdal 11000 90,61 $3,08 33,690 1,000,000 1.50%-2.00% 19250 2006 2008
TOTAL 33,890 1,000 000 19250
Nom:
1. Tax estimates are bassd on $770,000 of building motkGt value and $230!000 of land market value.
2. TIF run usumes 100% of I'" l>ulldlng is constructed by January 2, 2007 for payal:>lo 2008.
Tota' Local Fiscal Local Fiscal State-wide Fiscal Slate-wide Market
U... Ta. Ta. Dlspantles Ta. Dlspantle. Property Local Disparities Property Value Total
Capacity Capacity T.. Capacity Rale Ta. Role Tax Rale Taxes Taxes TaX8$ Taxes Taxes
Comm.ercl.-I 19250 19250 0 1.22110 0.0??oo 0.51121 23 506 0 9841 544 33,890
TOTAL 19250 19,250 0 1.22110 0.0??oo 0.51121 23506 0 9841 544 33890
Note:
1. Montloello doe<< nol pay Fiscal Disparill...
.
Prepared by Ehlers & As.soelates, Inc..
P,..llmlnary: For Discussion Purposes ONLY
Landmark
7/21/2005 Page 2 or 2
el~.~,~,~,~,~
CITY OF MONTICELLO. LANDMARK SQUARE"
Bue Flacal Captured Seml-Annual State Admin. Semi-Annual Seml-Annual PAYMENT DATE
PERIOD BEGINNING T.. Olspa"tie. Tax Gross Ta. Auditor at Net Tax Present PERIOD ENDING
Vrs. Mth. Vr. Ca acl Reduction Ca acl Increment 0.38% 10.00% Incremenl Value Vrs. Mth. Vr.
0.0 02-01 2006 5,318 0.0 oa.01 2006
0.0 08-01 2000 5,318 0 Present Value Ollie - 8-01-06 0 0 0 0 0,0 02-01 2007
0.0 02-01 2007 5,318 0 0 0 0 0 0 0 0.0 oa.01 2007
0.0 08-01 2007 5318 0 0 0 0 0 0 0 0,0 02-01 2008
0 13,933 8,506 (31) (848) 7,628 6,712
0.5 08-01 2008 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 13,213 1.0 02-01 2009
1.0 02-01 2009 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 19,509 1.5 08-01 2008
1.5 08-01 2009 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 25,608 2.0 02-01 2010
2.0 02-01 2010 5,318 19,250 0 13,933 8,506 (31) (848) 7.628 31,514 2.5 08-01 2010
2.5 oa.01 2010 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 37,234 3.0 02-01 2011
3,0 02-01 2011 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 42,774 3.5 08-01 2011
3.5 08-01 2011 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 48,140 4,0 02-01 2012
4.0 02-01 2012 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 53,337 4.5 oa.01 2012
4.5 08-01 2012 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 58,370 5.0 02-01 2013
5,0 02-01 2013 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 83,245 5.5 08--01 2013
5.5 oa.01 2013 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 67,967 8,0 02-01 2014
8.0 02-01 2014 5,318 19,250 0 13,933 8,506 (31) (548) 7,828 72.539 8.5 08-01 2014
8.5 oa.01 2014 5,318 19,250 0 13,933 8,506 (31) (548) 7,628 78,968 7.0 02-01 2015
7.0 02-<)1 2015 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 81,258 7.5 08-01 2015
7.5 08-01 2015 5,318 19,250 0 13,933 8,506 (31) (848) 7.828 85,412 8.0 02-01 2016
8,0 02-01 2018 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 89,436 8.5 08-01 2016
8.5 oa.01 2016 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 00,333 9.0 02-01 2017
9.0 02-01 2017 5,318 18.250 0 13,933 8,506 (31) (848) 7,828 97,107 9.5 08-01 2017
9.5 08-01 2017 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 100,763 10.0 02-01 2018
10.0 02-01 2018 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 104,304 10,5 Q8.01 2018
10.5 oa.01 2018 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 107,733 11.0 02-01 2019
11.0 02-01 2019 5,318 19.250 0 13,933 8,506 (31) (848) 7,628 111,054 11.5 08-01 2019
11.5 08-01 2019 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 114,270 12.0 02-01 2020
12.0 02-01 2020 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 117,386 12.5 Q8.01 2020
12.5 08-01 2020 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 120,403 13.0 02--01 2021
13.0 02-01 2021 5.318 19,250 0 13,933 8,506 (31) (848) 7,628 123,325 13,5 08-01 2021
13.5 oa.01 2021 5,318 18,250 0 13,933 8,508 (31) (848) 7,828 126,158 14.0 02-01 2022
14.0 02-01 2022 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 128,897 14.5 08-01 2022
14.5 08-01 2022 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 131,552 15.0 02-01 2023
15.0 02-01 2023 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 134,123 15.5 08-01 2023
15.5 Q6.01 2023 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 136,613 18.0 02-01 2024
18,0 02-01 2024 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 139,026 16.5 08-01 2024
5 08-01 2024 5,318 18,250 0 13,933 8,506 (31) (848) 7,828 141,382 17,0 02-01 2025
02-01 2025 5,318 19,250 0 13.933 8,506 (31) (848) 7,628 143,624 17.5 08-01 2025
oa.01 2025 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 145,818 18.0 02-<)1 2026
.0 02--01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 147,938 18,5 08-01 2028
18,5 Q8.01 2028 5,318 19,250 0 13.933 8,506 (31) (848) 7.828 149,994 19.0 02.01 2027
19.0 02-01 2027 5,318 19,250 0 13,933 8,506 (31) (548) 7,628 151,984 19.5 08-01 2027
19.5 08-01 2027 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 153,913 20,0 02.01 2028
20.0 02-01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 155,780 20,5 08-01 2028
20,5 08-01 2028 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 157,589 21.0 02-01 2029
21.0 02-01 2029 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 159,341 21.5 08-01 2029
21.5 08-01 2029 5,318 19,250 0 13,933 6,506 (31) (548) 7,628 181.037 22.0 02-01 2030
22.0 02-01 2030 5,318 19.250 0 13,933 8,506 (31) (848) 7,628 162,881 22.5 oa.01 2030
22.5 08-01 2030 5,318 19,250 0 13,933 8.506 (31) (548) 7,828 184,272 23.0 02-01 2031
23.0 02--01 2031 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 185,814 23,5 08-01 2031
23.5 08-01 2031 5,318 19,250 0 13,833 8,506 (31) (848) 7,828 187,306 24.0 02-01 2032
24.0 02.01 2032 5,318 19,250 0 13,933 8,506 (31) (848) 7,628 168,752 24.5 08-01 2032
24.5 oa.01 2032 5,318 19,250 0 13,933 8,506 (31) (848) 7,828 170,153 25.0 02--01 2033
25,0 02-01 2033 5,318 19,250 0 13.933 8,506 (31) (848) 7,628 171,509 25.5 08-01 2033
25.5 08-01 2033 5318 19250 0 13933 8506 31 848 7628 172 623 26.0 02-01 2034
Totals 44 337 1592 44 074 398 670
Pre.ent Value Date - 8.01--06 198 982 694 19203 172 823
Note:
1. Slale Auditor payment is baSed on 1st half, pay 2005 actual and may increase over tenn Of district.
2. Assumea development I. con.tructad in 2008, assessed In 2007 and first Increment ia paid in 2008.
3. Amount of increment will Vilry cktp9nding upon market valuer tax ratesl class rates, construction schedule and inflation on market value.
4. Inflation on tax rates cannot l>o captured - TAX RATES COULD OECUNE
5. TIF does not capture state wide property Ia.... or mar1<v1 value property Iaxes,
6. IF INFLATIONARY TIF IS RECEIVED IN 2007, THE FINAL INCREMENT WILL BE 211/33,
How Tulnc.remr.nt is Calculated
Tbtal Pl'operty Tues 33,8~ Current Mark;et VlIIII:ue - Est. 3~,500
less Sta1e To: -9,841 New Ml!Ir\l.:et Vl!IltHI ~ Est 1,000,000
Ies. Market Val.. T.. -544 ~fl8fflnOl 645,500
less EDstinl:' Tues ~ Es~"'at< PrMient Vl!llue of Tax Ineremem 1 08 ,982
AllRual TaJ: Ineremm Fioanl:ina: 17,013 It:!IS aDY admin. Fees Difference 445,518
V~lue Ukel to Oocur Without Tax Inc:rernent ts lM;$ Than: 4-46 518
.
Prepared lty EtIlel'!l & Alilioclatss, tnc;:.
ProUmln.'Y' For Diliculi5iora Purposet. ONLY
u,ruhnaJk
.
LANDMARK SQUARE II
.-....----...-.....--.-
.. --...,,,.-....-.,--.-.
.--...".''''-'' ".-.-., ...--. ---..,..---,.---.....--..'-' .--....----"..--.--.'..-."...---
WITH NO TIF ASSISTANCE WITH TIF ASSISTANCE
..- .-. ,.--.-.' .--- "...-.. ..-.-." -.-., .-.".' ".-- .",..-..""-' ..--.....--...".---."--
Sources and Uses Sources and Uses
-.. -.","---" -.-. "..-.-". -,--"" --_.' ".--. ..,-.-."--- ,-,,,._,,,-,,,,-_.,..,._,,,~,,,,,_._,.,.
SOURCES SOURCES
.---."---'" ------ ..-.---,'-' ..--..,,'---" --......,.-.- ---",-"",-,,-'-'.'-"
. Mo~gage . .____n___ L ___--.J'~00,P-00.90 $_____1!435,OOq.9~
EquiL________ $ __ _____ 348,415.0.Q..L____ __~8,41-~.OO
Tax__lncrem~~----L--- ______. $__~~,090.00
Total Sources
--".,....---..... ..---."''''''---'' - - - -- -- -- -- - -- -- -- --- -
USES USES
. ..-....,...-.....".-.'....-.. ...--.,,'- -. -.--..",.,'-' --....'--.' -..---..-
~_ ______~5!009.00 ~____~~,OOO.OO-
$___ 20,09p.00..!....- ______ 20,000.00__
$ $
$______475,'100.00- $_______475,0(}0.f:)0
Land
.._. m___ ".__. ..--.-"."'-
Demolition
--.--..'.---".' .---..'.'---.
Relocation
- .-... ---- ----....--
Subtotal Land Costs
_ Construction_____~______ \!37,OOO.00 $
Sitework $ 5,000.00 $
S!?i~CorrElc:tion______ $-=-_~__----=--- .... 5,900.09 $
Tenant Improvements $ 165,000.00 $
-- ..-. --.". "...-.--".. .--..---. -
Subtotal Constru~tion qost~L___1 ,J..!..?, 000. 00 $
---.'."..- ..---.-...--.-.-"-..'" ...--.-" .---
-. -.",,'."".-. ...- ..-...--.'-
______937,.900.90
5,000.00
- .-. ..--. ..--.. --..'.--. .-.-
_________?,900.qo
165,000.00
_____1,_!1?, 000:00
.---... . ,,--.--... .-----.... ..---.. ...-- -.. ..-. .-..--..-... .-.. ..--.... ..--. .--.--. .-.-.. .-... ..--..... ..---. ..--
.
~Q!!Cost~ $______!63,590.00_ __L_________~_ 6~,5qO_~OO
Taxe~_____n__ ~_____~!.~90.00_ ~....______.....b5_00.qO_
Yin_an~ Fees________ _ $________J...5,QOO:00 $ . _______J..?,()OO.OO
~roject fI.1Cinager_____ !..._ ____~,900.00 $ _______ 4,_000.9Q..
Developer FEle___ ..____ $ __. ._n____76..!..4..!?00 $___ _____......If!,415.00
Contingency $ 100,000.00 $ 100,000.00
.--.--. -----. -.---.. ...----.
____~ubb~_taIS!?ft q()l:;~s _$____.____361 ,4_15.0QL------~61,4-15.00-
______ _____T~~I_Uses ~_______1_,94B,415:00 $__________ 1!9~B,415.pQ..
..--.-" -. ....--.. ..-.-.-.-.-- .--. .----. ...-... --..". .-.--
_ n_... ._.__......__,,"'__ -
_. "..__._.." .._m". ____.. .---.. "'..- ---.. .--- .,,--_... .-.-.... ".-... .".-..
Restaurant 3000sf
--.. ..-.. .---..''''.--
Office 2400sf
-.-...."'--..-..""'-.----."-..-.."..--..
Salon 2400sf
.--".-...-.... ..--. .-.",'-
Office 2400sf
---"...--......--."---.
Other 800 sf
.--.".....-."...."..-...-'--
_"acancy @ 5or~_ __
INCOME STATEMENT
.___.. .._. .,,___.....__....____ __... ."m._.."'__ .- ...-.".--.'" .-..
_.!...... __ __...i~.()00.09 $ _____~~,OOO.OO
$ ______...l..~,~00._09 ~______~B,400.90
$ ____~6,OOO:OQ.. $____ ____~6,OOO:OO
~. __ ____ ___3I?,OqO:00 ..L_____ __36,000.00-
~___n___12,9()0.oo $ ___n_.. 12,000.OQ
$_ _____~8,175.00) $_ ____-..J~JL5.pO)
--..---.-.-.'''--'. "..-......- -..". ..--..."'----....--.. ..-.-..,,-... - ------ -- .---""--' ---... ..-
~____1~~,2-25.00 J_______16?,?2~.0()
TOTAL INCOME
Mortgage, 6.5ro,lQyrter~ . $ _ __ ... (143,_148.00) $_._ n_-.D28,376.00)
..-- .--. ..---.-...--","-. - ...--. ..--.... ,,---- ..--.. .-.. ..-
..-.. ..---. -- --..'... ..'- .---....- ..-..-.--.",-.
$
_~~,07!-OO $
5.48%
33,849.00
__...."__'. .___..m__..'__.
9.72%
Net Income
--.""-.-.,,.-..'..-."-."--.
Return on E ui
.
~'.
{,; I"
I ,"
IV'.}
/. / ,/
I ! D ~
I I "'d9 ~DD ffi
iloII:. r '\to z
.~ .. · 21 t:l
( o-l o-l o-l W. !II
:: ! III i (Iii
~il=il~1
II t i
~ ~ r
.
.
.
HRA Agenda - 08/16/05
7.
Consideration to discuss a reauest for redevelopment assistance for purchase and
demolition of a l!aral!e located within TIF District 1-22.
A. Reference and backl!round:
It has come to the attention of Barry Fluth that the Koppy property along West Broadway is on
the market. The Koppy property is the parcel on which the garage is located and was
discussed during the Landmark Square I redevelopment project. Mr. Koppy was not
interested in selling at that time; however, discussions did center around the need to remove the
garage to improve parking capacity and traffic circulation. In addition to the $185,000 pay-as-
you-go TI F assistance for the redevelopment of the substandard gas station, the II RA agreed
to an additional up-front TIF assistance in the amount of$75,000. The $75,000 was for site
improvement costs associated with the construction of the ofT-site parking on five parcels to the
east including the Koppy parcel. $45,000 of the $75,000 was for improvements to the Koppy
I lamond, and Paulson parcels and the $30,000 for the then city-owned lot and other Hamond
parcel.
Barry's request is for additional up-front dollars to assist with acquisition of the garage and
demolition costs. Mr. Fluth would acquire the entire parcel including the building which
occupies an insurance business. Mr. Fluth's thought is: he'd get a better bid by combining the
demolition and site improvement costs with the Landmark Square II bids.
I told Barry to make his request to the HRA and to have an estimated cost to acquire the
Koppy parcel.
There is the question ofthe 11RA finding the dollars: It appears the greatest likelihood is from
either of the two older non-restrictive redevelopment districts: however, we would need to
check if the Plan would need modification. The second question is whether your previous
contribution assumed removal of the garage or what's the public purpose or developer's need.
There is no doubt the removal of the garage and the relocation of the trash enclosure as planned
in Phase II would improve the parking capacity and traffic circulation.
The City Administrator and myself recalI the $75,000 contribution assumed the garage would
be removed in the future, Open for discussion.
Consideration to ado t a resolution authorizin execution of a Tax Increment Pled e
Al!reement with the City of Monticello relatinl! to $25.150.000 G. O. Bonds. Series
2005A.
.
8.
H RA Agenda - 08/16/05
A. Reference and backl!round:
The HRA is asked to adopt a resolution authorizing execution of the Pledge Agreement with the
City relating to the $25,150,000 G.O. Bond. The bond closing is scheduled for August 17,
2005.
The Pledge Agreement dated August 17,2005, states the HRA pledges the tax increment from
TTF District No.I-34 (Target + project) toward principal and interest of the bonds. With the
establishment ofTIF District No. 1-34, the estimated net present value (NPV) amount of tax
increment to be generated was $3,085,000 over 15 years. The remaining balance of the TIF
Bond ($8,850,000) is paid through a tax levy and special assessments.
B.
1.
.
2.
'"'
-) .
c.
.
Alternative Action:
A motion to adopt a resolution authorizing execution of a Tax Increment Pledge
Agreement with the City of Monticello relating to $25,150,000 G.O. Bonds, Series
2005A.
^ motion to deny adoption of a resolution authorizing execution of a Tax ...............
A motion to table any action.
Recommendation:
City Administrator and Executive Director recommend alternative no. 1 as consistent with the
purpose ofTIF District No. 1-34.
n. Supportinl! Data:
Resolution for adoption and copy of Pledge Agreement.
.
.
.
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTION OF A
TAX INCREMENT PLEDGE AGREEMENT WITH THE
CITY OF MONTICELLO RELATING TO $25,150,000GENERAL
OBLIGATION BONDS, SERIES 2005A
WHEREAS, The Housing and Redevelopment Authority in and for the City of
Monticello, Minnesota (the "HRA") has established the Central Monticello Redevelopment
Project No. 1 (the "Project Area"), and approved a Redevelopment Plan (the "Plan") for the
Project Area; and
WHEREAS, the HRA and City have established Tax Increment Financing District No. 1-
34 (the "TIP District") within the Project Area in accordance with Minnesota Statutes,
Sections 469.174 to 469.179; and
WHEREAS, on July 25, 2005, the City Council approved the tax increment financing
plan for the TIF District; and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City has agreed to finance ccrtain public redevelopment
costs to be incurred by the HRA or the City in thc Project Area through the issuance of general
obligation bonds of the City in the principal amount of $8,550,000 (the "TIF Bonds"), which TIF
Bonds are issued as part of the City's Obligation Bonds, Series 2005A ("Series 2005A Bonds");
and
WI-JEREAS, the HRA has agreed, to pledge certain tax increment revenues to the City for
the principal and interest on the TIF Bonds; and
WHEREAS, the there has been presented to the HRA a Tax Increment Pledge Agreement
between the HRA and thc City providing for the pledge of tax increments from the TIF District
to payment of principal and interest on the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the "Board")
of the I-IRA, as follows:
1. The Chair and Secretary of the HRA are hereby authorized to execute and deliver
a 'Tax Increment Pledge Agreement with the City of Monticello, Minnesota substantially in the
form on file with the City.
2. This resolution shall be effective as of the date hereof.
.
.
.
Adopted by the Board of Commissioners of the Housing and Redevelopment Authority in
and for the City of Monticello, Minnesota this 16th day of August, 2005.
Chair
Attest:
Secretary
275953vl(SJ\3)
MN 100-120
CAW-260332vl
KG400.1
2
.
.
.
TAX INCREMENT PLEDGE AGREEMENT
by and between
CITY OF MONTICELLO, MINNESOTA
and
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND
FOR THE CITY OF MONTICELLO, MINNESOTA
TI-IlS AGREEMENT is made and entered into on or as of the 1 ih day of August, 2005,
by and between the City of Monticello, Minnesota (the "City"), and The Housing and
Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA").
WHEREAS, the HRA has established the Central Monticello Redevelopment Project
Arca (the "Project Area"), and approved a Redevelopment Plan (the "Plan") for the Project Area;
and
WHEREAS, the HRA and City have established Tax Increment Financing District No. 1-
34 (the 'TIF District") within the Project Area in accordance with Minnesota Statutes, Sections
469.174 to 469.179; and
WHEREAS, pursuant to authority conferred by Minnesota Statutes, Section 469.178, and
Minnesota Statutes, Chapter 475, the City has agreed to finance certain public redevelopment
costs to be incurred by the BRA or the City in the Project Area through the issuance of general
obligation bonds of the City in the principal amount of $8,550,000 (the "TIF Bonds"), which TIF
Bonds arc issued as part of the City's Obligation Bonds, Series 2005A ("Series 2005A Bonds");
and
WHEREAS, the I-IRA has agreed to pledge certain tax increment revenues to the City for
the principal and interest on the TIF Bonds.
WHEREAS, pursuant to Minnesota Statutes, Section 469.178, Subdivision 2, any
agreement to pledge tax increment revenues must be made by written agreement by and between
the HRA and the City and must be filed with the County Auditor of Wright County;
NOW, THEREFORE, the City and the HRA mutually agree to the following:
(1) The City will sell the Series 2005A Bonds, including the TIF Bonds.
(2) The proceeds from the sale of the bonds and interest earning thereon will be made
available to the City or HRA to payor reimburse the cost of City Project No.
2004-01 C together with a portion of the improvement project duly ordered as
Project No. 2004-2C, which projects are an interchange improvement and related
road improvements benefiting property within the TIF District.
(3)
The lIRA hereby pledges to the payment of the principal of and interest on the
T'IF Bonds portion of the Series 2005A Bonds the tax increments derived from the
SJ8-265R53v2
MN100-120
.
.
.
(4)
(5)
TIF District and received by the HRA, in an amount that, together with special
assessments pledge to the TIF Bonds, does not exceed 105% of such principal and
interest due on the TIF Bonds from time to time (the "Pledged Tax Increment").
Not less than three (3) business days prior to each debt service payment date for
the TIF Bonds, there shall be transferred from the account for the TIF District to
the TIF Account in the Debt Service Fund maintained by the City for the payment
of the Bonds, an amount of Pledged Tax Increment which when taken together
with amounts already on deposit in such Debt Service Fund, is equal to the
principal of and interest on the Bonds to become due on the subject payment date.
Any Pledged Tax Increment in excess of 105% of the principal and interest due
with respect to the Bonds on any payment date (after taking into account any
special assessments available for such purpose) may be retained by the HRA in
the tax increment account for the TIF District and applied to any public
redevelopment costs of the Project Area in accordance with law.
Without regard to anything in this Agreement to the contrary, Pledged Tax
Increment shall be available (at the HRA's option on a parity, superior or
subordinatc basis) to pay principal of and intcrest on both the Bonds and any other
obligations issued by the City, HRA or any other public body to finance public
redevelopment costs paid or incurrcd by the HRA in the Projcct Area. The HRA
reserves the right to release all or any portion of Pledged Tax Increment from the
plcdge under this Agreement (including without limitation the relcase of Pledged
Tax Increment from any specific parcel within TIF District No. 1-34) to the extcnt
permitted by law, provided that in no evcnt may the HRA reduce thc pledge such
that Pledged Tax Incrcment is reasonably expected to pay less than 20 percent of
principal and intercst on the TIF Bonds portion of the Series 2005A Bonds.
(6) An exccuted copy of this Agreement shall be filed with the County Auditor of
Wright County pursuant to the requircment contained in Minnesota Statutes,
Section 469.178, Subdivision 2.
WIL.LFC-195R44v I
FORMS-FORMS
(The remainder of this pagc is intentionally left blank.)
2
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IN WITNESS WHEREOF, the City and the HRA have caused this Agreement to be duly
executed on their behalf and their seals to be hereunto affixed and such signatures and seals to be
attested, as of the day and year first above written.
ATTEST:
CITY OF MONTICELLO, MINNESOTA
By
City Administrator
Mayor
(SEAL)
(Signature Page to the Tax Increment Pledge Agreement)
W}LLEC-195844vl
FORMS-FORMS
S-1
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ATTEST:
Secretary
(SEAL)
WILLEC-195844vl
FORMS-FORMS
THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF
MONTICELLO, MINNESOTA
By
Chair
(Signature Page to the Tax Increment Pledge Agreement)
S-2
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STATE OF MINNESOTA
COUNTY AUDITOR'S
COUNTY OF WRIGHT
CERT]FICATE
I, the undersigned County Auditor of Wright County, Minnesota, hereby certify that a
Tax Incrcmcnt Pledge Agreement by and between the City of Monticello, Minnesota and thc The
Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, dated as of
August 17,2005, relating to the City's $25,] 50,000 General Obligation Bonds, Series 2005A, has
been filed in my officc.
WITNESS my hand and official seal this 1 ih day of August, 2005.
County Auditor
Wright County, Milmesota
(SEAL)
Deputy
CAW-260332vl
KG400-]
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HRA AGENDA - 08/16/05
9.
Consideration to discuss a reQuest for renovation/renewal assistance for
improvements to a commercial huildin2: located within TIF District No. 1-6 (Raindance
Properties. )
A. Reference and back2:round:
The new owners of Maus Foods have inquired if the city has any funds to assist with renovation
of the store for purpose of up-grading to compete with the big box stores. I checked with
Steve I3ubul because Maus Food Store is Redevelopment TIF District No. I -6 and generates
the tax increment. TIF 1-6 is a non-restrictive district and as of the December 2004 TIf report
has a current balance of$1 72,000. Of the original $350,000 Bond issuance, the remaining
principal balance is $70,000 and the debt is expected to be retired in year 2006 ($35,000 P
and $4,410 I payment 2005 and the remaining in 2006). The required de-certification datc is
2013. With an annual $45,000 tax increment generated over seven years with no dcbt
payment, the HRA would accumulatc anothcr $315,000. The HRA needs a plan and;
perhaps, needs to modify the District Plan to ensure this tax increment does not go back to the
County.
Regards, Attorney Bubul suggested a low interest loan much as an EDA loan. Open for
discussion.
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Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Summary Statement
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Statement Date: August 11, 2005
Proiect
General
TIF District No. 1-34
TIF District No. 1-35 - Redevelopment
TIF District No. 1-36 - Economic Development
Total for this statement
~
Amount
Invoice #
$343.75
$9,750.00
$2,250.00
$2,250.00
330885
330886
330887
330888
$14,593.75
, S:dsu
\\r'
oS
"1--
C{.. \
~
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Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
General Financial Advisory Services Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
330885
August 11, 2005
Project: General
Date Worked k Description of Services
Hours Amount
2.00 250.00
.75 no charge
.75 no charge
.25 31.25
--.i?Q 62.50
4.25 $343.75
07-11-2005
07-13-2005
07 -13-2005
07-25-2005
07 -28-2005
MTR
ED
ED
ED
ED
TIF runs for PAYG notes and OSA reporting
Prepared: Miscellaneous QuickTIF program help
Prepared: Miscellaneous Quick TIF program help
Prepared: Excess increment reporting form help
Prepared: 2004 TIF reporting help: DOR abstract help,
extract and e-mail to staff
\~\C\~
\_\ \..y oI'~O' ..
Q-\':>. q,\'J._os.
~
Services Fees Due This Invoice
~.'~"~'-"""-'''''--'''--'._'--' ..--.......-.....--....]
Total Due This Invoice $343.75
.".,._'''-~_._,.__.,.'''._-,..,'''''-'~,._'''._''''..,_."'._-~,.
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Invoice #: 330885
Invoice Date: August 11, 2005
r-:;:".~----~.__..._m- --.. -l
I Total Due Thi~_lnV~i?~.._.~_.___._~43.75.
[~.~...__._._....._--_._....__...._.._.~._.__..._._-"-~..].
Please remit payment to: Ehlers & Associates, Inc.
Artn: Accounts Receivable Due Upon Receipt
3060 Centre Pointe Drive
Roseville, MN 55113
,--"'-"",.".~",._~,~.,'.,..._~-'-'-_.""~'~,.,_._._..._._,~.'--,..,.._-- ,-_.,."~,,,.._.
.
.
.
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Tax Increment Financing Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
330886
August 11, 2005
Project: TIF District No. 1-34
Flat Fee: Establishment of TIF District No. 1-34 Fiscal
Implications
Flat Fee: Establishment of TIF District No. 1-34 As of
Public Hearing
~,-\. ,?\<\.~
S"..J
'-~ 0 ~
t).(b. <6.~I?
c);;..
&
Flat Fee Due This Invoice
I Total ~~~,!~~~ .~~voice
4,875.00
4,875.00
$9,750.00
___ ....no$~,!~_~~~~
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Total Due This Invoice
1-- ~Iease remit payme~t .to: Ehlers & Associates, Inc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
-~ ~~~~
Invoice #:
Invoice Date:
330886
August11,2005
$9,750.00-]
Due Upon Receipt
.
.
.
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Tax Increment Financing Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362.8822
Invoice #:
Invoice Date:
330887
August 11, 2005
Project: TIF District No. 1 ~35 - Redevelopment
Flat Fee: TIF District No. 1-35
/J;J \ ~q
C
~7-
\_\ \.., S -
\ '2:> ~-" I Tot~I-Due This Invoice
? ~ \ ,) " ....-....-.- ---
~
Flat Fee Due This Invoice
$2,250.00
_n__~....
$2,25~~...1
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Invoice #:
Invoice Date:
[._"!:otal Due This Invoic-~=~_:_~-
330887
August 11, 2005
L,ea~~ ~~mit payment ;0: E~-;~rs & Associates, In~-. ---
AUn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
Due Upon Receipt
$2,250.00
_nJ
.
Ehlers & Associates, Inc.
Leaders in Public Finance
3060 Centre Pointe Drive
Roseville, MN 55113
(651) 697-8500
Tax Increment Financing Services Invoice
Monticello Housing And Redevelopment Authority
505 Walnut Street, Suite 1
Monticello, MN 55362-8822
Invoice #:
Invoice Date:
330888
August 11, 2005
Project: TIF District No. 1-36 - Economic Development
Flat Fee: TIF District No. 1-36
'-:> \0
~\lo s
. \'3.
'9
~\ qq
Flat Fee Due This Invoice
$2,250.00
~
c- I...!o_t~i D~-e This ~I!!~~i~~
. 'J. .r-- O-~
~ -" <
$2,2~0.oo_1
(Detach at perforation and return lower portion to Ehlers & Associates, Inc.)
Monticello Housing And Redevelopment Authority
Invoice #:
Invoice Date:
330888
August 11, 2005
. --~.$2,250.00-]
~~in~~!._ThiS InVOi~!
.
-=
I Please re~i; p~yment to: Eh 10rs- & ASSOciates,-lnc.
Attn: Accounts Receivable
3060 Centre Pointe Drive
Roseville, MN 55113
---- ~~- - ~~~
Due Upon Receipt
.
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HRA Agenda - 08116/05
11.
Consideration of H RA Executive Report.
a) TIF Annual Audit Reports to State out July 29,2005.
b) TIF pay-as-you-go semi-annual payments out August 1,2005.
c) Twin City Die Castings/City of Monticello Grant/Loan closed by State of Minnesota. This
means the EDA can now consider re-use of the $500,000 plus interest payhaek. See
attached. [.ooking to build a 5,000 sq ft accessory building of an aggregate exterior
material.
d) Dahlheimer's Distributing is relocating into the new city industrial park. -rhey plan to
construct a new 54,000 sq ft office/distribution center. Construction is planned to begin this
fall.
e) With the billboard along [-94 and the web site: monticelloland.com, a majority of the
inquiries will not meet a criteria tl)r the $1 price.
Leads: 200,000 sq 11. user. Ryan Companies called today
Great River Energy Headquarter building (not responded)
20,000 sq ft: producer of instant sauces, soups and gravy.
30,000 sq ft: machine shop (looking at Elk River)
10,000 sq ft warehouse (doesn't fit criteria)
Trailer sales, 3-5 acres (doesn't Lit criteria)
60,000 sq ft: huilder of dump hodies, grain bodies, and truck hoists.
18,000 sq ft general machining job shop (to Elk River)
30,000 sq ft sheet metal (to Elk River)
30,000AO,OOO sq ft: precision CNC machining shop (excellent)
I believe Barger and .I im Ilarwood looking to construct on site along Dundas Road fiJ[
Precision Technologies to move up from Rogers. Great company.
f) Attended Standard Iron's 75th Anniversary, WaI-mart Open J-Touse, and Premier Bank Open
House in Wal-mart. Met with Kaltec, Inc.
g) City Council interviewed individuals for new building inspector and city engineer positions
and offers extended.
h) Landmark Square II project and TfF application will be completed by September 12 for
redevelopment of three homes into an 11,000 sq ft retai I center on the corner of Locust and
Third Street West.
i) Marketing - Billboard up (in second location), web site up and running ( after billboard up
about 400 hits on web site), classified ad in Sunday Tribune, post card to brokers, realtors, etc.
noting we will pay commission. Planning to have the IDe meet at the Monticello
Business Center site on September 6, 7:00 a.m. with Monticello Times for celebration
and featured news article. BRA invited.
j) Fiber Optics Task Force - This group of volunteers and Council memher Mayer have heen
meeting f()r the last couple of months. Anywhere from 2 to 5 hours per week. They will be
.
H RA Agenda - 08/16/05
making a prcsentation and recommendation to the City Council on August 22. This week, in
addition to the weekly meeting, they will tour UMC along with the Council. They invited the
current providers (TDS and Charter) fe)[ a presentation and heard from other fiber optic
specialists. They should be commended for their long hours of research.
k) Meeting with developer of theater block scheduled for week of August 22.
1) HRA needs to review fund balances ofTIF 1-5 and 1-6.
m) Ehlers advised me their fees for establishment of TIF District will be going up as new
rcquirements for filing per Legislation.
n) Upon issuing certiJicate of completion for homes constructed by Ilans Ilagen Ilomes, the
closer did not record and they are unable to find originals. Will need to rc-issue when time
permits. Not clear title when they went to re-sale and close on house.
0) Based on thc suggestion of a consultant, a meeting to discuss the merger of the EDA and
I-IRA is scheduled for August 29, 1-2:00 p.m. with Attorney Bubul. The IDC was also
discussed.
P) Ehler's celebrating 50 years with a reception from 3-7:00 p.m. August 25 at their office in
Roseville.
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2
July 5, 2005
MONTICELLO
Craig and Susan Swiecichowski
P.O. Box 535
Monticello, MN 55362
Re: Request for copy of HRA appraisal
Dear Craig and Susan:
.
Per our telephone conversation to advice you that the Monticello Housing and Redcvelopment
Authority (HRA) at their June 27, 2005, meeting made a motion of no interest to purchase the property
at 154 West Broadway; you asked about receiving a copy of the HRA appraisal.
In chccking with the BRA Attorney, since the lIRA did not enter into a purchase agreement, the
appraisal is protccted nonpublic data and the HRA may not disclose the appraisal. This per Minncsota
Statutes, Section 13.44, subd. 3.
Should you have further questions, please call me at 763-271-3208.
With regards,
IIOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR TilE CITY OF MOnrrCELLO
C'.J~ \~tnQ rfJ~
OUic Koropchak
I':xeculive Director
c:
liRA Filt: /
.
Monti<.:L~llo City Ilall, 50S Waluut Street, Suite I, Moutieello, MN 553(i2-8WII . (763) 2952711 . Fax: (763) 295 4404
Office o!-I'ublic Works, 909 Golf Course Rd" Monticello, MN 55:l62 . (763) 295-3170' Fax: (763) 271-_,272
July 5, 2005
--
MONTICELLO
Dear Block 35 Property Owners:
On May 26, 2005, a number of the property-owners of Block 35 met with I lousing Redeveloplnent Authority
(HRA) Vice Chair Dan Frie, liRA Executive Director Ollie Koropchak, Council member Tom Perrault, and
Chamher Director Susie Wojchouski. On behalf of the HRA, I thank you for your time and appreciate your
willingness to discuss your plans with us. 'fhe purpose of the meeting was to gather information fi'om property-
owners ahout their long-term goals for their properties and a brief survey was distributed to help gather
infonnation. lhe information was sought in order to determine the viability of the HRA in pursuing a lead role
in redeveloping Block 35.
Based on the feedback received it appears that roughly half of the building owners are open to considering some
type of redevelopment depending on project type and associated costs. Also, there currently exists as many as
15 individual tenants in various stages oflease contracts and many of the properties are partially or fully owner-
occupied.
.The liRA has reviewed the inl'onnation provided and contemplated the necessary energy and capital required to
lead a sLlccessrul redevelopment effort. At this time, the commissioners are not convinced the IIRA can lead a
I3Iock 35 redevelopment errort to conelusion and have dccided to playa support role as is needed. While there
is some general interest in redevelopmcnt, the overall costs associated with a HRA drivcn project are currcntly
too great.
Downtown redevelopmcnt is a goal within the Monticello Comprehensive Plan and is supported by Mayor Clint
Herbst whcn financially viable. Should the Block 35 property owners wish to pursue a project of their own
design, the liRA is most willing to assist you.
Thank you again for your tilne and interest. Please call me at 763-271-320X, if you have any questions.
Sincerely,
1I0USING AND REDEVELOPMENT AUTllORITY
IN AND FOR TIlE CITY OF MONTICELLO
C) ~ \~U\,,~ i)~
Ollie Koropchak
Executive Dircctor
.c:
Clint IIerhst, Mayor
DarrinLahr, liRA Chair
liRA File
Monticello City Hall, 505 Walnut Street, Suite 1, Monticello, MN 55362-8831' (763) 295-2711 . Fax: (763) 295-4404
Office of Publie Works, 909 Golf Course Rd., Monticello, MN 55362 . (763) 295~3170' Fax: (763) 271-3272
.
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July 13,2005
--
MONTICELLO
rvlr. Denny Maas
Enpath Medical, Inc.
1530 I [lighw,ty 55 West
Minneapolis, i'vIN 55c.11P
Re: Monticello Business C\:nter
Dear Mr. Maas:
Thank you for taking time fi'om your busy schedule to visit with me. As I mentioned, Imct an Enpath representative
at the Expo in the Minneapolis Convcntion Center the earlier part of May. 'rhe individual noted that Enpath's future
plans may include the consolidation and relocation of their Bloomington and Plymouth facilities. The City of
Monticello's purpose at the Expo was to market the new city-owned [20-acre business center.
The Monticello Business Center is located northwest of the metro along [-9c.1 with easy access via 'rrunk Highway 25
and Chelsea Road West. Construction ofthe public utilities and roads is currently underway with completion
scheduled tlJr Lll[ 2005, The City of Monticello is offering bnd for $1.00 per square foot with no assessments, no
trunk fees, and no park fees to qualified businesses. Although one to two years appears to be a long way-out, it is
not too early for Enpath to research options for its expansion plans. Enclosed is the information you requested.
Also, please visit our web site at www.monticelloland.com
The City of Monticello, located in the northwest growth corridor, is a "city with a future" Close to the metro,
Monticello's housing permits average about 250 annually. Two major mixed-use developments are in concept stag\:.
One being a master planned gol f cours\: development consisting of approximately 2,000 housing units and a second
development with approximately 825 housing units. Wal-mart is scheduled to open in July, an [X-screen theater
opened t~ll1 2004, and a Montessori Charter School andlce Arena are scheduled to open this fal L Target and Home
Depot arc sch\:duled to open in November 2006 with numerous restaurants and other spin-off developments in the
pipeline. With a full-service I'lospital District, a state-of-the art School District, and varied recreational
opportunities; why have your employees continue to waste time in traffic congestion? Invest in a "city with a
future" while maintaining the benefits ora close proxirnity to nletro cultural/sporting events and the northern
Minnesota lakt;s.
I would like to schedule a time to visit your facility in \:ither Plymouth or Bloomington, please call me at 763-271-3208
upon reu;iving this inflJrlllation. [also encouragc and invite YOll and/or eornpany representatives to visit
Monticello and S(;t; I(H' yourself the amcnities and developing business center.
With regards,
('[TY OF MONTICELLO
C0~ ~d\~~
Ollie Koropchak
Economic Lkvelopment Director
Enclosures
c: Mayor Clint Hcrbst
Montict;lk, City I lall, 50S Walnut Stred, Suite I, Monticello, MN 55362-8831 . (763) 2')5-2711 . Fax: (763) 2')5.4404
Otliee or Pllbl ie Works, 909 (Jolf Course Rd., Monticello, MN 55362 . (763) 295-3170 . Fax: (763) 271-3272