EDA Agenda - 03/27/2024 (Workshop)AGENDA
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, March 27, 2024 — 7:00 a.m.
Academy Room, Monticello Community Center
Commissioners: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali Sittig,
011ie Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor Lloyd
Hilgart
Staff: Executive Director Jim Thares, Rachel Leonard, Angela Schumann, Hayden
Stensgard, Sarah Rathlisberger
1. General Business
A. Call to Order
B. Roll Call 7:00 a.m.
2. Consideration of Additional Agenda Items
3. Consent Agenda
A. Consideration of Resolution No. 2024-06 supporting Wright County Economic
Development Partnership (WCEDP) Funding from Wright County
4. Public Hearing
None
5. Regular Agenda
A. Consideration of Business Subsidy Pre -Application Review — Fairfield Marriott Hotel
Proposal
6. Other Business
A. Consideration of Economic Development Manager's Report
7. Adjournment
EDA Agenda: 03/27/2024
3A. Consideration of adopting a Resolution of Support for Wright County Economic
Development Partnership (WCEDP)
Prepared by:
Meeting Date:
❑ Regular Agenda Item
Economic Development Manager
03/27/2024
® Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Community & Economic Development
Coordinator
ACTION REQUESTED
Motion to adopt Resolution No. 2024-06, supporting the mission of the Wright County
Economic Development Partnership (WCEDP) and requesting continued funding from Wright
County.
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The EDA is asked to adopt Resolution No. 2024-06 expressing support for the Wright County
Economic Development Partnership (WCEDP). City staff recently received a request from the
WCEDP Board of Directors asking its members to consider encouraging the County to
contribute funding for the WCEDP as well as continue its significant participatory role in the
organization. The WCEDP is a non-profit entity engaged in a county wide economic
development effort and has been pursuing the activities of tax base growth and job growth -
creation opportunities for over 30 years. It has historically obtained its funding from its
members which include the County, local municipalities, townships, educational institutions
and a variety of private companies. Although, Wright County has typically provided a significant
portion of the annual funding for the WCEDP's yearly budget, the County Board of
Commissioners is currently evaluating its funding contribution and whether to maintain the
current level of support.
Without this critical county funding, the powers and capacity of the WCEDP would be
significantly reduced. While the City of Monticello has a strong, active, and committed
Economic Development Authority (EDA), the City has found value in the WCEDP since the two
entities have differentiated yet complementary focus areas. The Partnership and City staff have
a strong collaborative relationship that has resulted in effective workforce development,
business retention and expansion visits, proposal and prospect responses as well as survey,
marketing, and community and economic development awareness efforts. City staff view this
as a valuable component of the overall economic development activities in Monticello and
most effectively maintained through a fully funded WCEDP.
EDA Agenda: 03/27/2024
The City of Monticello EDA has for many years been the membership entity for the City of
Monticello along with providing the funds for the WCEDP annual membership fee. The City
Council was asked to consider adopting the same resolution at its regular meeting on March 25,
2024.
Budget Impact: The budget impact related to the land conveyance is minimal.
II. Staff Workload Impact: Staff involved in the discussions related to this item consist of
the City Administrator, Community Development Director, and the Economic
Development Manager.
III. Comprehensive Plan Impact: N/A
STAFF RECOMMENDATION
Staff recommend the EDA adopt the resolution of support for the WCEDP. If the resolution is
approved it will be forwarded to the WCEDP leadership for presentation to the Wright County
Board of Commissioners at the April 16, 2024, meeting.
SUPPORTING DATA
A. EDA Resolution 2024-06
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
WRIGHT COUNTY, MINNESOTA
EDA RESOLUTION NO. 2024-06
RESOLUTION REQUESTING CONTINUED FUNDING FOR THE
WRIGHT COUNTY ECONOMIC DEVELOPMENT PARTNERSHIP
WHEREAS, the Wright County Economic Development Partnership (the "Partnership")
is a non-profit agency with over 30 years of service to Wright County, its communities, and its
businesses; and,
WHEREAS, the Partnership brings together resources and contributions from many
sectors of the County — businesses, communities, non -profits, utility providers, Chambers of
Commerce, school districts, townships, cities, and County government itself — around the purpose
of creating employment opportunities and enhancing overall economic vitality; and,
WHEREAS, the Partnership fulfills its mission by providing technical and financial
assistance to businesses in Wright County and those seeking to locate to Wright County as well as
providing collaborative economic development assistance to the cities and townships; and,
WHEREAS, a significant value provided by the Partnership is the powerful, partnership -
orientated approach of all its activities as well as the collaborative nature of networking
opportunities, information sharing, and problem -solving which provide direct and indirect impacts
on the vitality of our County; and,
WHEREAS, investing in the Partnership provides the opportunity to expand employment
opportunities and increase the tax base, which has economic benefits for the entire County; and,
WHEREAS, a failure by Wright County to continue its funding for the Partnership would
have significant consequences on the ability of the organization to continue meeting its purpose
and providing its services in Wright County.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF
THE CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY that the
EDA hereby requests that the Wright County Board of Commissioners approve the 2024 funding
request from the Wright County Economic Development Partnership in order to support its
ongoing collaborative efforts to assist businesses, cities, townships, and the County in creating
employment opportunities and enhancing overall economic vitality.
Approved by the Board of Commissioners of the City of Monticello Economic Development
Authority on March 27, 2024.
President
ATTEST:
Executive Director
EDA Agenda: 03/27/2024
5A. Consideration of Tax Abatement Pre -Application from Monticello Hospitality Group,
LLC — Fairfield by Marriott Hotel Development Proposal
Prepared by:
Meeting Date:
® Regular Agenda Item
Economic Development Manager
03/27/2024
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Finance Director, Community &
Economic Development Coordinator
ACTION REQUESTED
1. Motion to recommend that Monticello Hospitality Group, LLC continue forward with a
Business Subsidy Application for Tax Abatement for EDA review at a future meeting.
2. Motion of other.
REFERENCE AND BACKGROUND
The EDA is asked to review a Tax Abatement Pre -Application submitted by Monticello
Hospitality Group, LLC. The development team is seeking financial assistance for the proposed
development of a 98 -room Fairfield Inn & Suites by Marriott Hotel.
The total investment for the development proposal is expected to be approximately
$15,000,000 to $16,000,000. The developer has selected a site on the south side of Chelsea
Road across the street from the Best Western Hotel. This 3.60 -acre +/- development site is
located in the Pointes at Cedar (PAC) development and zoning district. A sit-down restaurant is
expected to be located adjacent to the hotel as an affiliated development. That component is a
separate development consideration (separate developer -owner team) and the proposal for
that element is an additional investment over and above the hotel cost total. The restaurant
proposal is not expected to seek Tax Abatement financial assistance.
As a reminder, the City and EDA recently approved a Tax Abatement Policy (October 2023).
With this Policy adoption, the City now has the ability to utilize an economic development tool
that is similar to TIF (Tax Increment Financing) in several ways, with some key differences.
Exhibit C of this report includes PowerPoint slides from the June 2023 City -EDA presentation
which reviews Tax Abatement and notes the primary differences between Tax Abatement and
TIF.
EDA Agenda: 03/27/2024
It should also be noted that under Minnesota state statutes, cities are the authorizing entity for
Tax Abatement. As per the recently adopted Policy, the EDA's role is to review applications for
Tax Abatement and provide recommendations to the City Council for final consideration.
The developer team will be at the meeting to review the proposal and answer questions that
the EDA may have regarding the development.
Budget Impact: The budget impact related to the Tax Abatement application submittal
is minimal at this point. The developer submitted the pre -application fee of $250. If the
EDA recommends that the developer proceed with the final Tax Abatement application,
they are prepared to submit the required escrow fee deposit of $10,000.
II. Staff Workload Impact: Staff involved in the review steps of the hotel proposal Tax
Abatement pre -application consists of the City Administrator, Community Development
Director, Finance Director, and Economic Development Manager.
III. Comprehensive Plan Impact: Direct analysis of the proposal's relationship to the
Monticello 2040 Vison + Plan will be made with a full business subsidy application.
STAFF RECOMMENDATION
Staff has reviewed the information provided by Monticello Hospitality Group, LLC and
recommends that the entity prepare a final Business Subsidy Tax Abatement Application for
EDA review of the requested assistance at a future meeting. A formal application with
required submittals will allow the EDA to consider the additional financial and business
information needed to make a formal recommendation to the City Council regarding the
proposal's adherence to abatement objectives. Staff's recommendation is based on the EDA's
continued work to attract hospitality resources to the community, including its recent update
to the Hospitality Study.
SUPPORTING DATA
A. Tax Abatement Application — Fairfield Marriott Hotel Development
B. Aerial Photo - Proposed Development Site
C. Tax Abatement PowerPoint Slides
D. Tax Abatement Policy
Fairfield Inn and Suites
City of Monticello Economic Development Authority
Application for Business Assistance Financing
EXECUTIVE SUMMARY
Good Neighbor Properties is excited to propose the development of a 98 room Fairfield Inn and Suites on The Pointes at Cedar
District.
The hotel's owner, Monticello Hospitality Group, LLC., will bring Monticello its first Marriott brand hotel. The four-story hotel will
feature 98 rooms, an indoor pool, meeting space, exercise area, and breakfast dining space for guests.
The Hotel project will be situated on the southwest quadrant of the intersection of Chelsea Road and Edmonson Ave.
Launched in 1987, Fairfield Inn & Suites by Marriott is designed for today's traveler who is looking to be productive on the road,
whether for business or leisure. In addition to complimentary Wi-Fi and breakfast, Fairfield Inn & Suites offers thoughtfully designed
rooms and suites that provide separate living, working, and sleeping areas. With more than 700 properties throughout the United
States, Canada and Mexico, Fairfield Inn & 5uites hotels participate in the award-winning Marriott Rewards® frequent travel
program that allows members to earn hotel points or airline miles for every dollar spent during each stay.
The requested tax abatement will provide an avenue to a targeted return needed to raise equity and bank financing. Additionally, it
would provide the project flexibility to incorporate requested design features in the Pointes at Cedar District.
This development will provide more than 30 jobs and will provide an asset to local businesses, public events, and tourism. Marriott
Bonvoy is known for its industry leading rewards program which will draw in local business travelers as well as providing an
attractive option for community events and local travel. The name recognition of a hotel and restaurant will also provide an
attractive draw off of the freeway.
EXHIBITS
1) Land Use Applieation.2024.FF.v2 3.5.24
2) GNP Development References --3-6-24
3) Proforma Analysis
4) Contribution Agreement— Monticello Hospitality Group + Deephaven Development
We kindly thank the Economic Development Authority for their attention to our submission. We look forward to delivering a
development that makes the community proud and brings positive synergy with the surrounding developments and local
businesses.
Respectfully,
Rob Thompson and Ted Christianson
GoodNeighbor Properties
CITY OF MONTICELLO ECONOMIC DEVELOPMIN'1' AUTHORITY
BUSINESS SUBSIDY APPLICATION
BUSINESS ASSISTANCE FINANCING
Legal name of applicant: Monticello Hospitality Group, LLC
Address: 1910 42"Ave West, Suite Spa Alexandria, MN 55308
612-812-1 S&3 (Rab) & 701-3b 1-3734 (Ted Q
Telephone number:
Rob Thompson or Ted Christianson
Name of contact person: _
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
I . A map showing the exact boundaries of proposed development. Included in Exhibit 1
2. Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion. Included in Exhibit 1
�. The existing Comprehensive Guide Plan Land Ilse designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned. Included in Exhibit 1
4. A statement identifying how the increment assistance will be used and why it is necessary to
undertake the project.
5. A statement identifying the public benefits of the proposal including estimated increase in
property valuation, new jobs to be created, hourly wages and other community assets.
G. A written description of the developer's business, principals, history, and past projects
Included in Exhibit 2
I understand that the application fee will be used for EDA staff and consultant costs and may be partially
refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA
Board and be based on the costs incurred by the EDA prior to withdrawing the request for assistance. If
the initial application fee is insufficient, I will be responsible for additional deposits.
SIGNATURE
Applicant's signature:
Date:
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUT14ORITY
Application for Business Assistance Financing
GENERAL INFORMATION:
Business Name:
Monticello Hospitality Group, LLC Date: 3-1-24
1910 42nd Ave West. Suite 300 Alexandria. MN 56308
Address:
Type (Partnership, etc.);
Authorized Representative:
Description of Business:
Limited Liability Company
Rob Thompson or Ted Christianson 612-812-1563 (Rob)
Phone: 701-361-3734 (Ted)
98 room Fairfield Inn & Suites by Marriott with Meeting rooms. and 130 -seat
Restaurant. Reslaurant cost estimated us• ars additional S3h1
Legal Counsel: Amy Clark -- Smith and Strege LTD
322 Dakota Avenue j PO Sox 38
Wahpeton, N❑ 58075
Address:
FINANCIAL BACKGROUND:
NO
1. Have you ever filed for bankruptcy?
NO
2. Have you ever defaulted on any loan commitment?
Phone:
701-642-2568
In the Process with Sarah Kortmansk_v
3. Have you applied for conventional financing for the project? ofNoth Star Bank
4. List financial references:
Corey Simonson —First Western Bank Alexandria MN 320-760-6374
a.
2
h. Craig Olson - Bremer Bank Alexandria MN 320-815-1125
Jon Kretchman - JBK Funding 701-371-6487
C.
Yes
5. Tuve you ever used Business Assistance Financing before?
The Rune in Alexandria with AA)~DC , Hatchery Row in Battle Lake
MN with their EDA Both Projects are under construction and use TIF.
The Cottage in Fergus Falls, MN. completed using 20 -year tax
If yes, what, where and when? abatement.
PROJECT INFORMATION:
1. Location of Proposed Project:
Southwest quadrant of the intersection of Chelsea Road and Edmonson
Ave.
2. Amount of Business Assistance requested?
Abatement of taxes for maximum time allowed
Provides feasible investment return and bank financing.
Additionally, it would provide the project flexibility to incorporate
3. Need for Business Assistance: requested design features in the Pointes at Cedar District,
4, Present ownership of site.
DeepHaven
30-}
S. Number of permanent jobs created as a result of project?
0 Current
5. Estimated annual sales: Present: $2,500,000 Year 1 Future:
15 to 18 million
7. Market value of project following completion:
June 2024
S. Anticipated start date:
FINANCIAL INFORMATION: (For Hotel QAW
1. Estimated project related costs:
a. Land acquisition
b. Site development
c. Building cost
d. Equipment
1,000,000
5550,000
S9,850,000
S 1,700,11110
3
Year 5 - $4,000,000
Completion Date: May 2025
e. Architectural/engineering fee
f. Legal fees
g. Ofd sine development costs
`'. Source of financing:
a. Private financing institution
b. Tax increment funds
c. Other public fiends
d. Developer equity
542MOO
S15,000
$1,910,000
5 75°,I0
Abatement doesn't provide
any cash. Further clarification
needed.
25%
PLEASE INCLUDE:
1. Preliminary financial commitment from bank. 75% of project costs
2. Plans and thawing of project. Exhibit 1
I Background material of company. Exhibit 2
4. Pro Forma analysis. Exhibit 3
5. Financial statements.
Statement of property ownership or control. Exhibit 4
Payment of application fee of $250.00
GoodNeighbor Properties, LLC Sob Thompson TedChr+sde on
Man gMember Managing Member
1910 42M Ave C6-81x1563 001.36]3]34
Alexandria. MN 56306 E mb.e Wn®gnpmp dies.n E led.Mdsdanson499nproperties.net
.,nproperties.net
CONTENTS
ABOUT US 3
DEVELOPMENTTEAM 4
TITAN MACHINERY DEALERSHIPS 5
SUNOPTA WAREHOUSE 6
201Q BUILDING 7
lgla BUILDING 8
FAIRFIELD INN AND SUITES g
TITAN MACHINERY SRC 10
MAPLEWOOD MANOR 11
LONGTREES WOODFIRE GRILL 12
BOULDER TAPHOUSE 13
THE COTTAGE 14
CURRENT DEVELOPMENTS 15
GNP
c.
C. M. CONSTRUCTION
Since the x940s, C.I. Construction, LLC has gained a hard-earned reputation speciatizing in design -Build Construction and Construction Management. Our
commitment to building solid, lasting relationships is evident in our continued success. We strive to develop relationships that are based on respect, trust,
and honesty. This is what we firmly believe sets us apart from other companies and what has provided us with a List of distinguished past customers today.
in fact, quality of construction and good customer relations are the cornerstones of our business. Our design -build construction experience, our in-house
design capabilities and our experience with a diverse range of procurement methods ensure that your goals for quality, budget, schedule, and scope are
always realized no matter where you are building your building project We take great pride in our ability to offer our clients expertise at every stage of the
construction process. Our longevity is a testament to the value we provide Owners.
BUILDING DESIGN
By combining creative design capabilities with quality products in masonry, concrete, wood or Butler® steel buildings, we create a Facility that works far you.
Since the 3g4cs, we have been dedicated to providing uncompromised service to our clients and professional growth and fulfillment for our employees. In
short, we take great pride in helping our clients see their dream became a reality. Our in-house design team uses Revit by Autodesk. By utilizing BIM (BuiLding
Information Modeling) technology you are able to visualize your investment day one. Being able to view the model from different simulated views gives the
owner the ftexibiLity to make design changes before the project has started. This gives the Owner maximum design flexibility before costs are Locked in, and
Limits the last minute changes that can be budget and schedule killers. As an experienced BIM team we are able to work as Primary Designers or collaborate
with a Design Team of Architects and Engineers to avoid costly design clashes that tend to surface when 3D modeling is not utilized.
CONSTRUCTION MANAGEMENT
Every owner has different needs, and with our diverse experiences in project delivery methods we can find the right fit for your project. Our company has
specialized in a value-added delivery method referred to as Multiple Prime Contracting. White many Construction Managers go the easy route and select one
General Contractor our team breaks each project down into smatter scopes to minimize markups and find the best value for the Owner with each trade. Many
Construction Managers may shy away from the added work of Multiple Prime Contracting. We utilize aur experience and Best -In -Class project management
and contract software to make sure all Contractors are working towards the common goal of delivering a project on time and on budget.
2410 BUILDING -ALEXANDRIA, MN
ROB THOMPSON
NOW LN K100 0YU1.4Vk1: 1'.] FA & LIMLIT" IRgWlulQu■I.1-7 t7
-35+ Years of Real Estate Development Experience
-President/Owner of C. I. Construction
-Business Degree from St. John's University
TED CHRISTIANSON
-3o+ years of Real Estate Development Experience
-President /Managing Partner of Adam Smith Properties
-Masters Degree from North Dakota State University
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DEVELOPMENT HIGHLIGHTS
Project Location: Multiple Locations in MN, NO, SD, IA, NE
Total SF' 1,021,757
Facility overview: Farm equipment dealerships including office space, shop, awash
bay, parts, and retail spaces. Most sites also include standalone equipment stor-
age facility.
Development roles: Assisted in land acquisition, assisted in obtained financing,
designed project. built by C.I. Construction.
Property Owner: Dealer Sites
Contact: John Kretchman 701-371-6487
Tenant: Titan Machinery
Contact: Peter Christianson 701-238-441$ XAA/ 0//1
RK_1,-J RN
W 46TH STREET, A GOODNEIGHBOR PROPERTY
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PROJECT HIGHLIGHTS
PROJECT LOCATION: Alexandria, MN
TOTAL SF: 252,000
DEVELOPMENT HIGHLIGHTS
Pre-engineered building with MR -24 roof and Precast wall panels. Features Cooler/Freezer storage as
well as an incubator room. Land acquisition, obtained financing, designed project, built by
Cl Construction. Coordinated pipeline easement with NuStar Energy, Overcame zoning
challenges with iakeshore setbacks and wetland mitigation.
Obtained TF Financing,
FINANCING ENTITY: Bremer Bank
TENANTS: SunOpta
2010 BUILDING, A GDODNEIGHBOR PROPERTY
igio BUILDING DEVELOPMENT
FaciEity overview: initiaL buildout 26,93zSF. 2o,580SF addition. Warehouse, loading docks,
and offices.
FAIRFIELD INN AND SUITES
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DEVELOPMENT HIGHLIGHTS
Project Location: Alexandria, MN Total SF: 44.835
Facility overview: Three story 8o room Marriott brand hotel. Includes meeting
space, Indoor Pool, and Fitness Room.
Development roles: Acquired Land, obtained financing, designed project, obtained
franchise license, built by C.I. Construction.
Financing Contact: Bremer Bank - Craig Olson - VP Commercial Lending
(320) 762-4707
Property Owner: Alexandria Hotel Group, LLC
HoteL Management Company:
American Hospitality Management
Contact: Fred Kindle (231) 881-1144
TITAN MACHINERY - SHARED RESOURCE CENTER
s
DEVELOPMENT HIGHLIGHTS
Project Location: Fargo. ND
Total SF: 78,700
Facility overview: Corporate headquarters of Titan Machinery featuring offices,
shop training. Warehouse. kitchen facility, and cafeteria,
Development roles: Assisted in land acquisitic
built by C.I. Construction.
Property Owner: Dealer Sites, LLC
Contact: John Kretchman 701-371-6487
Tenant: Titan Machinery
Contact: Peter Christianson 701-238-4418
MAPLEWOOD MANOR
1010 1st ST. N.
DEVELOPMENT HIGHLIGHTS
Project Location: Etbow Lake, MN Total SF; 43,139
Facility overview: Remodel and addition to old hospital and connected apart-
ments. Converted to assisted living facitity.
Development roles: Acquired land, designed project, negotiated TIF and grant
money, built by C.I. Construction.
Financing Contact: Craig Olson - Bremer Sank - (324) 762-,4707
Property Owner: Good Neig h bors - Maplewood Manor, LLC
Operation Management Company -
Northern Oaks Senior Lining
Contact: Amy Deacon - (701) 793-7880
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AP
i
Y
Project Location: Etbow Lake, MN Total SF; 43,139
Facility overview: Remodel and addition to old hospital and connected apart-
ments. Converted to assisted living facitity.
Development roles: Acquired land, designed project, negotiated TIF and grant
money, built by C.I. Construction.
Financing Contact: Craig Olson - Bremer Sank - (324) 762-,4707
Property Owner: Good Neig h bors - Maplewood Manor, LLC
Operation Management Company -
Northern Oaks Senior Lining
Contact: Amy Deacon - (701) 793-7880
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LONGTREE'S WOODFIRE GRILL
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h7MUMO zIQIs: Ilei: Ill CN:1161
Project Location: Alexandria, MN
Total SF: 5-190
Devetopment rotes: Acquired land. obtained financing, designed project, built by
C.I. Construction.
Financing Entity: Bremer Bank
Financing Contact: Craig Olson - VP Commen
Property downer: GoodNeighbors South, LLC
Tenant: Longtree's Woodfire Grill
Contact: Mike Rakun (612)799-0418
GGGDNEIGHBGRS 2 DEVELOPMENT
THE COTTAGE, A GOODNEIGHHOR PROPERTY
PROJECT HIGHLIGHTS
PROJECT LOCATION Fergus Falls, MN
TOTAL SF: 37,132
PROJECT OVERVIEW: Remodel of historic building into an assisted living facility.
Obtained financing, designed project, built by Cl Construction. Coordinated with National
Park Service for Historic Tax Credit.
PROPERTY OWNER: GoodNeighbors - The Cottage, LLC
OPERATION MANAGEMENT COMPANY:
Northern Oaks Senior Living
VAII'm
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CURRENT DEVELOPMENTS COMPLETION IN 2024
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THE HATCHERY
MIXED USE DEVELOPMENT - BATTLE LAPS, MN
TotaL SF: 46,834
Owner: GoodNeighbors - The Hatchery. LLC
Thrivent, Masonic Lodge. CAEP
ant contact, Greg Smedsrud CA EP 218-7-7e-2991
of Battle Lake Contact Vat Martin 612-508-0459
UocuSign Envelope 10: F01 DA901-6B5F-4G3E-A7C0-EB047B9 F6A59
MONTICELLO HOSPITALITY GROUP, LLC
CONTRIBUTION AGREEMENT AND LETTER OF INVESTMENT INTENT
This CONTRIBUTION AGREEMENT AND LETTER OF INVESTMENT INTENT
(this "Agreement") is entered into on December 5th 2023, between Monticello Hospitality Group,
LLC, a Minnesota limited liability company (the "Company"), and Deephaven Development,
LLC, a Minnesota limited liability company (the "Contributor").
I. Agreement of Sale. The Company agrees to sell to Contributor, and Contributor agrees
to purchase from the Company, 20 Series A units of limited liability company membership
interests (the "Units") in exchange for the contribution of the following described real
property ("Property"):
Legal Description: Lots Three (3), and Four (4) of Block I of Deephaven 3,
according to the recorded plat thereof, Wright County,
Minnesota. (See Attached Exhibit A)
Tax Parcel #: 155255000010
The Property is intended to include approximately 2 acres of real property located within
lots 3 & 4 of the official plat of Deephaven 3 to be determined by the final survey, The
parties agree that the fair market value of the Property is $1,000,000.00.
2, Contribution of Property.
11 Closing Date. The contribution of the Property to the Company shall take place as
of May 1, 2023, which for purposes of this Agreement may be referred to as the
"Closing" or "Closing Date". In the event that the Company has not closed on the
property by the abovementioned date the Contributor shall have the right to cancel
the contract with no further obligation to the Company.
2,2 Contingency The location of the approximately 2 acres within Lots 3 & 4 shall be
subject to mutual agreement between the Company and the Contributor. In the
event that mutual agreement cannot be reached within a "reasonable" amount of
time the Contributor shall have the right to cancel the agreement without any further
obligation. For the purpose of this agreement reasonable amount of time shall be
defined as 5 days following the Company presenting the Contributor with the
proposed location.
The Contributors obligation to close the transaction contemplated by this
agreement is contingent upon Marriotts approval of an +1-80 room hotel.
2.3 Warranty Deed; Title, Liens & Encumbrances. As of the Closing Date,
Contributor shall transfer title of the Property to Company by a Warranty Deed
DocuSign Fnveiope ID; FDI❑A901-6B5F-4C3E-A7CO-EBGD7S1F6A59
conveying good and marketable title to Company in consideration of and payment
for the Units. The transfer by Warranty Deed shall be free of all liens and
encumbrances except for the following:
(a) Building and zoning laws, subdivision laws, ordinances, state and federal
regulations, provided they do not adversely affect Company's intended use
of the Property.
(b) Conditions, covenants, restrictions, declarations, and easements of record,
if any, without effective forfeiture provisions and which do not interfere
with present improvements and with Company's intended use of the
Property.
2.4 Title Examination. Contributor shall furnish Company a title insurance
commitment to the Property showing good and marketable title in Contributor,
including legal access, ingress and egress to the Property, fiee and clear of all liens
and encumbrances, except as noted above. After receipt of the last of the title
insurance commitment and survey, if any, Company shall have 15 days to examine
said title insurance commitment and within said period of time shall promptly
notify Contributor of all objections thereto in writing, If Company notifies
Contributor of any objections to matters disclosed in the title commitment,
Contributor shall have a period of 90 days in which to cure Company's objections.
If Contributor is unable or unwilling to cure Company's objections within said
period of time or such further time as may be granted by Company, Company shall
be entitled to either (a) terminate this Agreement by notice to Contributor (b) waive
the uncured objections. Contributor shall in all events be obligated to discharge all
mortgage liens and other liens on or before the closing date.
2.5 Real Estate Faxes and Assessinents. Contributor agrees to pay all real estate taxes
and assessments for special improvements, which are due and payable in the year
prior to closing. Real estate taxes and assessments for special improvements due
and payable in the year of closing shall be prorated between Company and
Contributor on the basis of the real estate taxes and assessments for special
improvements due and payable in the year of closing, and in the event the exact
amount of the taxes and assessments due and payable in the year of closing are not
yet lcnown, the amount to be prorated shall be based on the real estate taxes and
assessments for special improvements due and payable in the year prior to closing,
Company agrees to pay the real estate taxes and assessments for special
improvements due and payable in all years subsequent to closing,
2.6 Documents for Closing. Contributor shall furnish the following documents at the
time of closing:
a. Warranty Deed.
b. Any Certificate of Real Estate Value or Fair Consideration required by the
applicable state agencies.
❑OGUSIgn Envolope ID: FD1DA901-6B5F-4C3E-A7G0-EB0Q7B1F6A59
C. Any documents required by the Company's title examination that are
necessary to convey title consistent with this Agreement.
d. An affidavit in a form presented by Company or by a title insurance
company evidencing the absence of banlzruptcies, judgments, tax liens,
construction or mechanic's lien rights affecting the Property, unrecorded
interests affecting the Property, persons in possession of the Property and
known encroachments or boundary line questions affecting the Property.
e. All appropriate Federal Income Tax Reporting Forms.
f. All appropriate disclosures and certificates regarding wells, septic/sewer
systems, ground water, environmental conditions or other conditions of the
Property which certificates are required by the state where the Property is
located.
g. All abstracts of title for the Property.
h. A non -foreign affidavit containing such infonnation as is required under
Section 1445(b)(2) of the Internal Revenue Code and any regulations
relating thereto,
Any other document required by this Agreement.
In addition, each party will deliver to the other party and any title company that
may be involved such agreements, assignments, conveyances, instruments,
documents, certificates and the like as may be reasonably required by either party
or the Title Company to consummate the sale of the Property from Contributor to
Company in accordance with the terms of this Agreement.
2.7 Allocation a Closin Ex enses. The parties shall apportion the closing expenses
in the following manner:
a. Contributor's expenses - Contributor shall be responsible for:
i. Any deed tax connected with the recording of the Warranty Deed.
ii, The recording fees for any corrective instruments.
iii. Its own attorney's fees.
iv. Any cost connected with the cost of the title insurance commitment,
or the preparation of any corrective documents.
V. The preparation costs of any documents that Contributor is required
to deliver to Company at or before closing.
VL One-half the cost of the closing fee charged by the title company.
DocuSlgn Envelope ID: FD1 DA901-665F-4C3E-A7CO-E8007B1 F6A59
b. Company's expenses - Company shall be responsible for:
L Recording fees for the Deed.
ii. its own attorney's fees, including fees for title opinions,
iii. The cost of owner's or lender's title insurance premiums.
iv. The preparation costs of any documents that Company is required
to deliver to Contributor at or before closing.
V. One-half the cost of the closing fee charged by the title company.
vi, All other costs specifically allocated to Company as set forth in this
Agreement.
vii. Survey costs, UCC Searches, inspection fees, lender fees,
appraisals, and environmental site assessments if ordered or
required by Company.
3. Representations and Warranties of Contributor. In consideration of the Company's
offer to sell the Units, Contributor hereby represents and warrants to the Company as
follows:
3.1 Access to Information. Contributor has been given access to full and complete
information regarding the Company, including but not limited to the Company's
Operating Agreement, as amended to date (the "Control Agreement"), and has
utilized such access to Contributor's satisfaction for the purpose of obtaining
information regarding the Company, and, particularly, Contributor has met with or
been given reasonable opportunity to meet with representatives of the Company for
the purpose of obtaining all information concerning the Company that Contributor
deems necessary to snake an informed investment decision,
3.2 Company's Business Plan. Contributor understands that any business plan or
similar document which Contributor- may have been shown or of which Contributor
may have been furnished a copy, is not a prospectus, placement memorandum,
offering circular, offering statement, or similar document. Any such document was
not prepared, and Contributor understands that any such document was not
prepared with the purpose of providing full and accurate disclosure to investors.
Contributor understands that any such document has been furnished to Contributor
only as part of an overall furnishing of information about the Company and that
Contributor has viewed the information set forth in any such docurnent with a
critical frame of mind and, to the extent that information contained in any such
document was deemed by Contributor to be important information in making an
investment decision, Contributor has discussed such information with the officers
and other personnel of the Company in order to form a better judgment regarding
the accuracy and adequacy of such information. Contributor agrees that no
statement in any document, even if framed as a factual statement, will, of itself,
oacuSign Envelope U FD1 ❑A901-5B5F-4C3E-A7CA-i`B007B1 FUA58
constitute a factual representation by the Company in light of the various purposes
for which any such document may have been created.
3.3 Financial Position. Contributor is in a financial position to hold the Units for an
indefinite period of time and is able to bear the economic risk and withstand a
complete loss of Contributor's investment in the Units.
3.4 Knowledge and Experience. Contributor, either alone or with the assistance of
Contributor's own professional advisors has such knowledge and experience in
financial and business matters that Contributor is capable of reading and
interpreting financial statements and evaluating the merits and risks of the
prospective investment in the Units.
3.5 Professional Investment Advice. Contributor has obtained, to the extent
Contributor deems necessary, professional investment advice with respect to the
risks inherent in an investment in the Units, and the suitability of an investment in
the Units in light of Contributor's financial condition and investment needs,
3.6 Suitability of Investment. Contributor believes that the investment in the Units is
suitable for Contributor based upon Contributor's investment objectives and
financial needs, and Contributor has adequate means for providing for
Contributor's current financial needs and personal contingencies and has no need
for liquidity of investment with respect to the Units.
3.7 Risk of Investment. Contributor recognizes that an investment in the Units is
highly speculative and involves a high degree of risk, including, but not limited to,
the risk of economic losses from operations of the Company and the loss of
Contributor's entire investment in the Company.
3.8 Value of Units. The contributor understands that the Company makes no
assurances whatsoever concerning the present or prospective value of the Units.
3.9 Restrictions on Units. Contributor understands that (i) there are substantial
restrictions on the transfer of the Units, (ii) there is not currently, and it is unlikely
that in the future these will exist, a public market for the Units, and (iii) accordingly,
for the above and other reasons, Contributor may not be able to liquidate an
investment in the Units for an indefinite period.
3.10 Tax Matters. Contributor acknowledges that the Company is a limited liability
company which has elected to be treated as a partnership for U.S. federal tax
purposes and that such election could result in personal tax liability to an investor
in the Company even though no funds are distributed by the Company,
3.11 Backup Withholding. Contributor certifies, under penalties of perjury, that the
undersigned is NOT subject to the backup withholding provisions of Section
3406(a)(i)(C) of the Internal Revenue Code of 1986, as amended. (Note: You are
subject to backup withholding if (i) you fail to furnish your Social Security number
or iaxpayer• identification number in this Agreement,: (ii) the Internal Revenue
Dacu&gn Envelope ID: FD1DAga1-655F-4C3E-A7CQ-F80D7B1F6A59
Service notifies the Company that you furnished an inconvet Social Security
number or taxpayer identification number, (iii} you are notified that your are Subject
to backup withholding, or (rv) yoga fail to certify thatyou are not subject to ba2cla p
withholding or you fail to certify your Social Securioy numher or taxpayer
identification number).
3.12 Investment Intent. The Units are being acquired for Contributor's own account
and for investment and without the intention of reselling or redistributing the Units,
Contributor has made no agreement with others regarding the Units, and
Contributor's financial condition is such that it is not likely that it will be necessary
to dispose of the Units in the foreseeable future.
3.13 Residency or Principal Place of Business. If Contributor is a natural person,
Contributor is a bona fide resident of, and is domiciled in and received the offer
and made the decision to invest in the Units in, the State of
(state where Contributor resides, if Contributor is an individual. If Contributor is
an entity, Contributor is organized and has its principal place of business in, and
received the offer and made the decision to invest in the Units, in the State of
Minnesota (state where Contributor is organizedlin.corporated, if Contributor is
an enti
3.14 Entity Contributors. If an entity, Contributor was not formed for the purpose of
investing in the Units.
3,15 Status as an "Accredited investor". Contributor is (check ALL that apply —
Contributor must be an accredited investor to acquire the Units.);
(a) Contributor is a natural person whose individual net worth or joint net
worth with Contributor spouse, at the tirne of investment, exceeds
$1,000,000, For the purposes of calculating net worth,
With respect to assets, do not include your primary residence, and
• With respect to liabilities, do not include any mortgages on your
primary residence except:
a Include any debt that you incurred within the last 50 days
that is secured by your primary residence (wiless you
incurred such debt in acquiring your primary residence), and
o Include any amount (other than amounts included above) by
which any debt secured by your primary residence exceeds
the fair market value of such residence,
(b) A natural person whose individual income was in excess of $200,000,
or whose joint income with his or her spouse was in excess of $300,000, in
each of the two most recent years, and who has a reasonable expectation of
reaching the same income level for the current year.
DocuSlgn Envelope IU; FE) IDA901-6B5F-4C3E-A7G0-EB007B1F6A59
(c) A governor or an executive officer/manager of the Company.
(d) A baric, insurance company, registered investment company, business
development company, small business investment company or employee
benefit plan.
(e) A savings and loan association, credit union, or similar financial
institution, or a registered broker or dealer.
(f) A private business development company,
(g) An organization described in Section 501(c)(3) of the Internal Revenue
Code with assets in excess of $5,000,000.
(h) A corporation, limited liability company, Massachusetts or similar
business trust, or partnership with assets in excess of $5,000,000.
(r) A trust with assets in excess of $5,000,000.
0) An entity in which all of the equity owners are accredited investors.
.Also check the item(s) (a) -(j) that applies. (This item is not available to an
irrevocable trust).
(k) A self-directed IRA, Keogh, or similar plan of which the individual
directing the investments qualifies as an "accredited investor" under one or
more of iterns (a) -(j), above. Also check the items) (a) -O) that applies.
(1) A revocable trust for the benefit of the grantor and/or the grantor's
family members, whose grantor qualifies as an "accredited investor"' under
one or more of items (a)_(j), above. Also check the item(s) (a) -(j) that
applies.
(m) Contributor is NOT an accredited investor.
3.15 Units Subject to Control Agreement. Contributor understands that all Units will
be subject to the Control Agreement (which includes substantial limitations on the
transferability of units), and agrees to become a party to the Control Agreement, if
not already a party to the Control Agreement.
3.17 Contributor a Party to Control Agreement. Subject to the terms and conditions
set forth in paragraph 2.1 regarding closing date, Contributor is deemed to have
become bound by, and a signatory to, the Control Agreement. Contributor
understands and agrees that the Units are subject to the terms and conditions of the
Control Agreement.
DocuSign Envelope la: FD1DA901-665F-4C3E-A7CO-EB00751F6A59
3.18 Notice of Member Meetings, Upon the execution and delivery of this Agreement,
Contributor is deemed to have agreed and consented to receiving notice of member
meetings by any means of electronic communication permitted by the Minnesota
Limited Liability Company Act, including electronic mail or facsimile at the email
address or fax number listed on the contributor information page of this Agreement,
Contributor agrees and understands that the foregoing consent is valid and in full
force and effect until revoked by Contributor in writing. Any such revocation
should be sent to the attention of Monticello Hospitality Group, LLC, Manager, at
the following address: 1910 42nd Avenue West, Suite 340, Alexandria, Minnesota
56308.
3.19 Company's Legal Counsel. That (i) the Company has engaged legal counsel to
represent the Company in connection with the offer and sale of securities
contemplated by this Agreement, (ii) legal counsel engaged by the Company does
not represent Contributor or Contributor's interests, and (iii) Contributor is not
relying on legal counsel engaged by the Company. Contributor has had the
opportunity to engage, and obtain advice from, Contributor's own legal counsel
with respect to the investment contemplated by this Agreement.
3.20 Forward -Looping Statements, Contributor understands that any information
provided in forward-looking statements about the Company's future plans and
prospects is uncertain and subject to all of the uncertainties inherent in future
predictions, and is not relying on any of the Company's financial projections or
forward-looking statements in making an investment decision to purchase the
Units.
3.21 General Solicitation or Advertising. Contributor is not purchasing the Units as
the result of any general solicitation or general advertising, including, but not
limited to any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or radia or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
3.22 Company's Right to Reject All or Part of Contribution. Contributor
understands that the Company is free to reject any contribution in whole and if the
Company determines to reject this contribution, any funds returned to the
undersigned will be without deduction frorn the funds or interest on the funds.
3.23 Indemnification. Contributor agrees to indemnify the Company, and each current
and future officer, board member, employee, agent and owner of the Company,
against and to hold them harmless from any danrage, loss, liability, claim or
expense including, without limitation, reasonable attorneys' fees resulting from or
arising out of the inaccuracy or alleged inaccuracy of any of the representations,
warranties or statements of Contributor contained in this Agreement.
4, Investment Purpose in Acquiring the Units, Contributor and the Company acknowledge
that the Units have not been registered under the Securities Act of 1933, as amended (the
❑oousign Envelope [D: FDIOA9Ol-fi55F-4t;3E-A7CO-ES0078IF6A59
"Act"), or applicable state securities laws and that the Units will be issued to Contributor
in reliance on exemptions from the registration requirements of the Act and applicable state
securities laws and in reliance on Contributor's representations and agreements contained
in this Agreement, Contributor is subscribing to acquire, and malting a contribution for,
the Units for the account of Conhibutor for investment purposes only and not with a view
to their resale or distribution. Contributor has no present intention to divide Contributor s
participation with others or to resell or otherwise dispose of all or any part of the Units. In
malting these representations, Contributor understands that, in the view of the Securities
and Exchange Commission, exemption of the Units from the registration requirements of
the Act would not be available if, notwithstanding the representations of Contributor,
Contributor has in mind merely acquiring the Units for resale upon the occurrence or
nonoccurrence of some predetermined event including, but not limited to, an intent to resell
by reason of any foreseeable specific Contingency or anticipated change in market values,
or any change in the condition of the Company, or in connection with a contemplated
liquidation or settlement of any loan obtained for the acquisition of the Units and for which
the Units were pledged, any of which would represent an intent inconsistent with the
representations set forth in this Agreement.
5. Compliance with Securities Act; Lack -up Restriction,
5.1 Transfer Restrictions, Conhibutor agrees that if the Units or any part of the Units
are sold or distributed in the future, Contributor may sell or distribute there only
pursuant to the requirements of the Act and applicable state securities laws.
Contributor agrees that Contributor will not transfer any part of the Units without
(i) obtaining an opinion of counsel satisfactory in form and substance to legal
counsel for the Company to the effect that such transfer is exempt from the
registration requirements under the Act and applicable state securities laws or
(ii) such registration.
5.2 Lock --up Restriction. if the Company or any successor entity of the Company
determines to complete an initial public offering of its securities, during the period
of duration (not to exceed 180 days or such lessor time period that the directors and
officers of the Company or its successor entity are subject to a similar restriction)
specified by the Company (or its successor entity) and an underwriter of the
securities of the Company (or its successor entity) following the effective date of
the registration statement of the Company (or its successor entity) in connection
with an initial public offering of its securities to the general public, the undersigned
will not, without the prior written consent of the managing underwriter, directly or
indirectly, sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of its Units or
any securities issuable upon conversion of the Units (the "Lock-up Restriction").
In order to enforce the Lock-up Restriction, the Company or Its successor entity
may impose stop -transfer instructions with respect to the Units or the securities
issuable upon conversion of the Units until the end of such period. Notwithstanding
the foregoing, the undersigned will only be subject to the Lock-up Restriction if
each of the officers and directors of the Company or its successor entity, as the case
may be, are subject to a similar Lock. -up Restriction of equal or greater duration.
DocuSign Envelope ID: FD11JA901-685F-4C3E-A7C0-E9007B1F6A59
6, Restrictive Legend. Contributor agrees that Company may place a restrictive legend on
the instrument representing the Units (if any) containing substantially the following
language:
"The securities represented by this document have not been
registered under the Securities Act of 1933, as amended (the "Act"),
have not been registered under any state securities laws. They may
not be sold, offered for sale, or transferred in the absence of either
an effective registration under the Act, and under the applicable state
securities laws, or an opinion of counsel for the Company that such
transaction is exempt fi-orn registration under the Act, and under the
applicable state securities laws,"
"The Uziits are subject to, and are transferable only upon the terms
and conditions of that certain Operating Agreement as the same may
be amended from time to time, among the Members of the
Company. A copy of said Agreement is on file with. the Company.
Any attempted transfer of these Units other than in accordance with
said Agreement, whether by or pursuant to a gift, sale, pledge, or
otherwise, and whether voluntarily or involuntarily, is void and of
no effect."
The contributor understands that the Company does not intend to, and has no obligation to,
issue any certificates or other instrument representing ownership of the Units.
7. Knowledge of Transfer Restrictions on the Units. Contributor understands that the Units
are not freely transferable and may in fact be prohibited from sale for an extended period
of time and that, as a consequence of these restrictions, the undersigned must bear the
economic risk of investment in the Units for an indefinite period of time and may have
extremely limited opportunities to dispose of them. Contributor understands that Rule 144
under the Act pen -nits the transfer of "restricted securities" of the type here involved only
under certain conditions, including a minimum one-year holding period and the availability
to the public of certain information concerning the Company, and that such conditions
permitting sale may never occur. Additionally, all Units will be subject to the Compaiay°s
Control Agreement,
8. Binding Effect; Termination. Neither this Agreement nor any interest in this Agreement
will be assignable by Contributor without the prior written consent of the Company, The
provisions of this Agreement will be binding upon and inure to the benefit of the parties to
this Agreement, and their respective heirs, legal representatives, successors and assigns,
9. Representations to Survive Delivery; Additional Information, The representations,
warranties, and agreements of Contributor contained in this Agreement will remain
operative and in full force and effect and will survive the contribution of all or any part of
Property pursuant to Section 2 above. Contributor agrees to furnish to the Company, upon
request, such additional information as may be deemed necessary to determine the
undersigned's suitability as an investor.
DocuSign Envelope lD:F01DA901-6B5F-4C3E-A7GO-EBOO7F3IHAS
10. Governing Law, Choice of Venue, Waiver of Jury Trial. Notwithstanding the fact that
the Company may conduct business in states other than the State of Minnesota, and
notwithstanding the fact that some or all of the Members may be residents of states other
than Minnesota, this Agreement and the rights of the parties under this Agreement will be
governed by, interpreted, and enforced in accordance with the laws of the State of
Minnesota, without regard to conflict of laws principles or provisions. Any action or
proceeding against any of the parties to this Agreement relating in any way to this
Agreement or the subject matter of this Agreement will be brought and enforced
exclusively in the competent state or federal courts of Minnesota, and the parties to this
Agreement consent to the exclusive jurisdiction of such courts in respect of such action or
proceeding. The parties waive their right to a trial by jury for any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this Agreement,
whether grounded in tort, contract or otherwise.
ISignatare pagefollo ws]
DocuSfgn Envelope ID: FD1DA501-685F-4C3E-A7C0-EBDU7B1F6A59
Signature Page to Monticello Hospitality Group, LLC Contribution Agreement and Letter
of Investment Intent
Dated:
12/6/2023
AZ)Contributor(s):
� w�
Contr(butor ignature)
Contributor (Signature, if more than one investor)
Mark Buchholz
Print Name
Print Name (If more than one investor)
437933 d Ave S Shite 121 Fara ND 58144
Address
Entity Contributors:
Dee haven Devela went LLC
Name of Entity Typ XW".0 r w
By:Mark Buchholz
Its: Managing Partner
3010 Sheyenne River Way West Fargo, ND 5$078
Address
The Company hereby accepts the contribution evidenced by this Agreement to be effective as of
12/6/2023 .2Q
MONTICELLO HOSPITALITY GROUP, LLC
BY GNEIGHB ROP RTIES, LLC,
ITS Ab
"R:
B i" _`
y
Tea Christianso , Manager
By:
Ro ert Thompson, Manager
Docusign Envelope ID: FQ1 DA901-6B6F-4C3F--A7CQ-EB00761 F5A59
CONTRIBUTOR INFORMATION
Dee haven Development, LLC
(Please print exact legal name(s) in which the Units are to be issued)
04-3509416
Taxpayer I.D. No. Taxpayer I.D. No.
(If more than one investor)
4379 33"d Ave S Suite 121
Address
City; Fargo
State:ND
Telephone Number: (_701_) 371-1646
Fax Number;
Email Address: Marlc@bucliprop.com
Check One:
Zip Code; 58104
Individual Ownership LLC*
Joint Tenants (3TWROS) Corporation*
Tenants in Common Revocable Trust's
Partnership* Irrevocable Trust*
_Qualified Retirement Account*# Other*
*If checked, complete the attached Certificate of Signatory.
#Far Purchases in a Qualified Retirement Account, i.e., IRA (please initial in the blank space
provided below).
Purchasing in a Retirement Account. An investment in a private placement of securities
is HIGHLY SPECULATIVE in nature. Accordingly, such an investment may not be appropriate
for Individual Retirement Accounts or other retirement -type accounts that carry conservative
investment objectives. If this investment is, in fact, purchased in a retirement -type account, the
undersigned hereby represents and affirms that the undersigned understands the risks of the
investment and has decided that such risks are consistent with the undersigned's investment
objectives for such account.
DocuSign Envelope ID: FD1 DA901-685F-4C3E-A7C0-EBOO781 F6A59
DocuSEgn Envalope 0. F010A901-6S5F-4ME-AXO-ES00731HASS
CERTIFICATE OF SIGNATORY
(To be completed if Units are being subscribed for by an Entity)
I, Mark Buchholz am the 0-peratiap, Partner
of Dee haven Development, LLC (the "Entity"),
I certify that I am empowered and duly authorized by the Entity to execute and carry out
the terms of the Contribution Agreement and Letter of Investment intent and to purchase and
hold the Units, and certify further that the Contribution Agreement and Letter of Investment
Intent has been duly and validly executed on behalf ofthe Entity and constitutes a legal and
binding obligation of the Entity.
IN WITNESS WIIEREOF, I have set my hand this b� day of
December 2023.
Docuslgnod by,
A(aA Ntw(/,
46A30�5
(Signature)
Operating Partner
(Title)
Mark Buchholz
(Please Print Name)
DoGUSign Envelope U FD1DA901-665F-4C3E-A7CQ-EB007B1F6A55
Execution Co�y
MONTICELLO HOSPITALITY GROUP, LLC
SIGNATURE PAGE AND CONSENT TO BE BOUND BY
OPERATING AGREEMENT
This Signature Page and Consent to be Bound by Operating Agreement by the
undersigned in connection with the undersigned's investment in Monticello Hospitality Group,
LLC, a Minnesota limited liability company (the "Company").
The undersigned hereby agrees to be subject to all terns and conditions of that certain
Operating Agreement among the members of the Company, and as the same may be amended
from time to time (the "Agreement"). Upon acceptance of the undersigned's Contribution
Agreement and Letter of Investment Intent by the Company, the undersigned will be deemed to
be a "Member" as set forth in the Agreement, With the exception of the addition of the
undersigned as an additional party, all other provisions of the Agreement will remain in full force
and effect.
Bate: 12/06/23
Member Name: Mark Buchholz
�y,Decuftnedby: (Print)
f �l.>7U' � b"�
By:
(Signature)
Its: (if an entity)
Deephaven Development, LLC
16
Consideration of Tax Abatement Pre-Application from Monticello Hospitality
Group, LLC.
Created by: City of Monticello
TAX INCREMENT FINANCING (TIF)
AND TAX ABATEMENT OVERVIEW
CITY OF MONTICELLO
EDA -CITY COUNCIL WORKSHOP
JUNE 14, 2023
Tammy Omdal, Northland Public Finance
NORTHLAND
'%� � PUBLIC FINANCE
NORTHLAND 41
PUBLIC FINANCE
W Tax abatement acts like a simpler and less
powerful version of TIF
■ City, county and school district have
independent authority to grant tax abatement
■ Different from TIF and authority of city to approve
capture of taxes
Acting alone, the city cannot generate the same
amount of revenue from tax abatement as TIF
NORTHLAND
PUBLIC FINANCE
■ No statutory criteria for findings for public
interest
■ May use one or multiple criteria
Public interest statement is included in the
approving resolution for Tax Abatement
■ Monticello approved a Tax Abatement project in 2017
(Resolution 2017-29) to help finance infrastructure
improvements for Fallon overpass and associated street
improvements, not to exceed amount of $9.0 million
NORTHLAND 43
PUBLIC FINANCE
1. Tax base 6. Infrastructure
2. Jobs
3. Public facilities
4. Redevelopment
5. Access to services for
residents
NORTHLAND
PUBLIC FINANCE
7. Phase in tax increase from
significant investment
8. Stabilize tax base for
utility property
_ Certain projects may be of sufficient
importance to encourage county and/or school
district to consider tax abatement
■ If one political subdivision declines to abate,
then the city abatement levy can be made for a
maximum of 20 years
If a city, county and school district all abate,
then the maximum period drops to 15 years
NORTHLAND
PUBLIC FINANCE
■ Total amount of property taxes abated (tax
abatement levy) in any year may not exceed
greater of:
(1) ten percent of the net tax capacity of the political
subdivision for the taxes payable year to which the
abatement applies, or (2) $200,000, whichever is
greater
NORTHLAND 46
PUBLIC FINANCE
7 Tax abatement in MN works more like a rebate
than an abatement
■ Certify levy equal to the amount of taxes to be
abated
Tax abatement levy is spread the same as the
general fund levy
� Revenue from tax abatement levy can be paid to
a developer or retained by city for qualified uses
NORTHLAND
PUBLIC FINANCE
Calculating Tax Abatement Levy
Parcels
Subject to
Abatement
Parcels
Subject to
Abatement
Parcels
Subject to
Abatement
Parcels
Subject to
Abatement
Abated
Tax Capacity Value
of Parcels
Jurisdiction's
Tax Rate
Annual
Tax
Abatement
Levy
Projects that do not meet criteria for
other financing, including criteria for
TIF:
■ Redevelopment lacking "substandard"
buildings
■ Housing without specific income
requirements
■ Economic development other than stated
"industrial" uses in TIF Act
NORTHLAND 49
PUBLIC FINANCE
Funding options are
similar to TIF
■ Three basic options:
Pay -As -You -Go
(reimbursement over
time)
Issuance of Bonds
Inter -fund Loan
NORTHLAND 50
PUBLIC FINANCE
— City has authority to issue general
obligation Tax Abatement Bonds
Bonds are supported by tax abatement
levy
Limits on use of proceeds
costs
Not subject to debt limit
No election required
for eligible
NORTHLAND 51
PUBLIC FINANCE
Helpful to create and adopt policy
guidelines for Tax Abatement
■ Define objectives/ criteria for use in
advance
■ Provide consistent framework for
evaluating requests
NORTHLAND 52
PUBLIC FINANCE
Tax Abatement can be a useful tool for
assisting private development, especially for
projects that may not qualify for TIF
Not as complex to establish and manage as TIF
City property taxes are captured and used to
finance activities need to encourage
development or to support other public
interests
■ Other taxing jurisdiction taxes (county and school
district) have independent authority to consider tax
abatement (separate from city)
NORTHLAND 53
PUBLIC FINANCE
CITY OF
City Policy and
:.Montfc
Ro Procedure
SECTION: FINANCE NO: FIN -
REFERENCE: Economic Development Date: 10-23-2023
Next Review Date: TBD
TITLE: TAX ABATEMENT POLICY
1.0 Purpose
Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (the "Abatement Act"), provides
the City of Monticello, Minnesota (the "City") with the authority to grant tax abatements in certain
instances. The City intends to provide tax abatement assistance ("Abatement") to:
• Encourage desirable development or redevelopment in the City (each, a "Project") that would
not occur but for the Abatement.
• Leverage Abatement and other public dollars to maximize private sector investment in the City.
2.0 Policy
Project Requirements
To grant an Abatement for a Project, the City must find that (1) the benefits of the Project to the City will
be equal to or greater than the cost of the Abatement; (2) the Project would not be feasible but -for the
granting of the Abatement; (3) the Project is in conformity with the City's Comprehensive Plan, Land Use
Plan and Zoning Ordinances and the Abatement Act; and (4) the Project will serve the public interests of
the City because it will:
• Retain or create jobs that offer stable employment or living wages and benefits,
• Enhance or diversify the City's economy based on a demonstrated need;
• Provide transportation or public infrastructure improvements;
• Remove blight and/or encourage high quality redevelopment of commercial and industrial areas
through private investment;
• Provide affordable housing;
• Improve the quality of life of City residents by providing a desirable good or service.
Ineligible Projects
The City will not grant an Abatement for Projects where:
• The sole public benefit of the Project is the preservation or increase of the City's tax base.
• The Project is purely speculative (the Developer must demonstrate a market demand for the
Project).
• The Abatement would create an unfair and significant competitive financial advantage over
other developments in the area.
• The Project would place extraordinary demands on City services or would generate significant
negative environmental impacts.
Developer Requirements
For the City to grant an Abatement for a Project, the developer of the Project (the "Developer") must:
• Invest a reasonable amount of cash equity into the Project, as determined by the City.
• Provide financial guarantees to ensure completion of the Project to the satisfaction of the City,
including, but not limited to, letters of credit, personal guarantees, etc., unless an exception is
granted by the City.
• Demonstrate, to the City's sole satisfaction, an ability to complete the Project based on, among
other things, past development experience and credit history, among other factors including
the size and scope of the proposed project.
• Demonstrate the benefits to the City, specifically how the Project meets the Project
Requirements of this policy.
• Provide any market, financial, environmental, or other data as the City or its consultants may
reasonably request to analyze the Project and the need for the Abatement.
• The Developer shall comply in all respects with the City's Business Subsidy Criteria and comply
with all the Minnesota Statutes, Section 1161.993 through 1161.995 (the "Business Subsidy
Act"), if applicable.
• The Developer shall be responsible for the payment of all costs of the City's consultants relating
to the abatement, including but not limited to the fees of the City's municipal advisor and
attorney.
Abatement Funds
Amount: The length and amount of the Abatement will be based on the Abatement Act and a specific
Project's need as determined by the City.
Source: The Abatement shall be garnered from City property taxes collected from the added tax base of
the Project. Property taxes collected from the base value of the land or any current structures on the
property will not be abated as part of any assistance granted under this Policy.
Uses: When applicable, Abatement funds shall be prioritized in use to finance public improvements and
City -supported design elements associated with the Project. Abatement funds may also be used to
finance:
• Legal, administrative, and engineering costs;
• Site preparation, site improvement, land purchase*, demolition, and environmental
remediation; and
• Capitalized interest and bonding costs, if applicable.
*Abatement shall not be provided to reimburse land purchases in excess of a property's fair market
value. An appraisal by a third party, agreed upon by the City and Developer and paid for with
Developer's escrow, will determine the fair market value of a property.
MN190\101\900566.v3
Payments: Approved Abatements shall be provided to the Developer upon receipt of the Abatement by
the City, otherwise referred to as the pay-as-you-go method.
Abatement Approval Process:
1. Developer submits the completed application along with a nonrefundable initial application fee
and escrow as established in the City's adopted ordinance for fee schedule. City staff reviews
the application and completes the Application Review Worksheet (the "Worksheet").
2. The Worksheet is submitted to City's Economic Development Authority (the "EDA") who
reviews the Project and provides a recommendation on whether or not to grant the Abatement.
3. The Worksheet and the EDA's recommendation are submitted to the City Council for review. If
preliminary approval of the Abatement is granted, the applicant submits the final application
fee and escrow as established in the City's adopted ordinance for fee schedule.
4. If preliminary approval is granted, City staff works with its consultants to prepare the
documents necessary to approve the Abatement, including but not limited to a tax abatement
assistance agreement between the City and the Developer including a business subsidy
agreement, if required by the Business Subsidy Act (the "Development Agreement").
5. Public hearing notice(s) are published.
6. Public hearing(s) on the Abatement and, if necessary, the granting of a business subsidy as
required by the Business Subsidy Act, are held. Please note that the City will not hold a public
hearing on the Abatement until the Development Agreement is in final form and has been
signed by the Developer.
7. The City Council grants final approval or denial of the Abatement and the Development
Agreement, including a business subsidy agreement, if applicable.
The City reserves the right to approve or reject Projects on a case-by-case basis, regardless of the EDA's
recommendation, taking into consideration established policies, Project criteria, and potential demand
on City services weighed against the potential Project benefits. Meeting the Project and Developer
requirements detailed in this Tax Abatement Policy does not guarantee that a Project will be granted an
Abatement. Approval or denial of one Project is not intended to set precedent for approval or denial of
another Project. Further, the City Council may deviate from this Tax Abatement Policy for Projects that
supersede the objectives identified herein, for which the public benefit shall be enumerated within the
official findings for the Abatement.
3.0 Scope
This policy applies to all projects that apply for and may receive tax abatement assistance pursuant to
the Abatement Act.
4.0
HISTORY
Approval Date:
10-23-2023
Approved by:
City Council
Amendment Date:
Approved by:
Amendment Date:
Approved by:
MN190\101\900566.v3
EDA Agenda: 3/27/2024
6A. Economic Development Manager's Report
Prepared by:
Meeting Date:
❑x Other Business
Economic Development Manager
3/27/2024
Reviewed by:
Approved by:
N/A
N/A
REFERENCE AND BACKGROUND
1. The EDAM Day At the Capitol —March 20, 2024 —A verbal summary will be provided by
staff at the meeting.
2. Prospect List Update - See Exhibit A.
PROSPECT LIST 03/27/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained lobs New lobs Total Investment Project Status
I IL
5/22/2018
Karlsburger Foods
Food Products Mfg.
Facilty Expansion 20,000 sq. ft. +/-
42
10 to
20
$4,500,000
On Hold
11/29/2018
Project Blitzen
Precision Machining
Exist Bldg or New Const.
12,000 sq. ft.
10
$1,200,000
Concept Stage
3/28/2019
Project Nutt
Co -Working Space
Existing Building
?
?
?
?
Concept Stage
5/9/2019
Project FSJP Light Mfg -Res. Lab New Construction 20,000 sq. ft. 0 20+1- $1,400,000 Active Search
8/16/2019
Project Jaguar Office
New Construction
22,000 sq. ft. 22
4
$2,700,000 Active Search
1/20/2020
Project Panda v3
Service -Child Care
New Construction
10,500 sq. ft.
0
21
$4,100,000
Active Search
12/23/20- 6-
30-22
Project TDBBST
Industrial
New Construction
10,000 to 15,000 sq.
ft.
0
9
$1,850,000
Concept Stage
2/16/2021
Project Cold
Industrial -Warehouse -Di
stri
New Construction
80,000 sq. ft.
0
21
$12,000,000
Concept Stage
3/19/2021
Project Orion
Warehouse-Distributi
on
New Construction
832,500 sq. ft.
0
500
$125,000,000
Active Search
2/28/2022
Project Emma II Light Ind -Assembly
New Construction
4
$1,350,000
Active Search
6/16/2021
Project UBAA Child Care Services
New Construction or Exist
5,000 sq. ft. 0
14 to 19
$2,000,000
Act Search
6/30/2021
Project Ecosphere Industrial Tech Mfg.
New Construction
1,000,000 sq. ft. 0
1122
$85,000,000
Act Search
7/29/2021
Project BA710 Lt Assem-Distribute
New Construction
6,500 to 7,000 sq. ft 0
10
$650,000
Active Search
10/28/2021
Project Stallion Technology Service
New Construction
42,000 sq. ft.
40
$3,600,000
Active Search
2/7/2022
Project Shepherd Lt Assembly Distribution New Construction 75,000 sq. ft. 75 $10,500,000 Active Search
III
PROSPECT LIST 03/27/2024
Date of
Contact
Company Name Business Category Project Description Building-Facility Retained lobs New lobs Total Investment Project Status
4/28/2022
Project Cougar Precision Machining-Mfg. New Construction 35,000 to 45,000 sq. ft. 38 $4,700,000 Active Search
8/11/2022
Project Sing Precision Machining New Construction 400,000 sq. ft. 0 500 $90,000,000 Active Search
10/28/2022
Project IAG Mfg. New Construction 300,000 sq. ft.? 0 50? $70 to $80,000,000 Active Search
11/9/2022
Project Tea
Mfg
New Construction
25,000 sq. ft.
55
20
$5,800,000
Active Search
12/13/2022
Project Love
Mfg
New Construction
250,000
130
$24,000,000
Active Search
4/20/2023
Project Lodge DH1
Lodging-Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
4/20/2023
Project Lodge RS2
Lodging Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
4/26/2023
Project Lodge DC3
Lodging Service
New Construction
?
?
?
$9,500,000 to
$12,500,000
Active Search
5/30/2023
Project Flower-M
&M
Commercial
Concept Expansion
?
?
?
?
Concept
6/9/2023
Project Pez
Mfg
New Construction
6,000 to 8,500 sq. ft.
12
2
$1.300,000
Active Search
7/1/2023
Project V-MOB
MOB
New Construction
175,000+sq. ft.
?
$21,000,000
Identified Site
8/16/2023
Project Lodge RT4
Lodging-Hopsitality
New Construction
98 Room Hotel
N/A
30
$12,500,000 to
$13,600,000
Identified Site
8/31/2023
Project Enclave-
W300
Industrial - Warehouse-
Distr
New Construction
300,000 sq. ft.
N/A
?
$30,000,000 to
$34,000,000
Active Search
PROSPECT LIST 03/27/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained lobs New lobs Total Investment Project Status
9/19/2023
Project Panda #4
SZ
Childcare Facility
New Construction
?
N/A
?
$2,000,000 +/-
Active Search
10/12/2023
Project Fun
Entertainment
Expansion
2,400 sq. ft.
N/A
4
$200,000
Concept
1/17/2024
Project Tex
Industrial
New Construction
500,000 sq. ft.
0
100
$500,000,000
Active Search
1/17/2024
Project G
Industrial
New Construction
1,000,000 sq. ft.
0
?
$120,000,000
Focused Search
1/2/2024
Project Simpl
Office
New Construction -Build Out
13,303 sq. ft.
23
50
$2,000,000
Identified Site
2/12/2024
Project Lodge-
MSMWDC
Lodging -Hospitality
New Construction
?
0
10
$12,000,000
Identified Site
3/5/2024
Project Panda 20-
MS
Child Care Facility
New Construction
20,000 sq. ft.
0
20
$2,800,000
Active Search
Contacts: M
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