EDA Agenda - 04/10/2024AGENDA
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, April 10, 2024 — 6:00 p.m.
Mississippi Room, Monticello Community Center
ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING
Academy Room
5:00 p.m. Review and Discussion of Retail Market Analysis Proposal
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 6:00 p.m.
2. Consideration of Additional Agenda Items
3. Consent Agenda
A. Consideration of Payment of Bills
B. Consideration of Approving Regular Meeting Minutes— October 25, 2023
C. Consideration of Approving Joint Workshop Meeting Minutes — March 13, 2024
D. Consideration of Approving Regular Meeting Minutes — March 13, 2024
4. Public Hearing
None
5. Regular Agenda
A. Consideration of Business Subsidy Pre -Application Monticello Hospitality, LLC -
Fairfield by Marriott Hotel Development Proposal
B. Consideration of Greater Monticello Enterprise Fund (GMEF) Pre -Application -
Excelsior Tool, Inc. in the amount of $250,000
C. Consideration of Authorizing a Certificate of Completion and approval of a partial
disbursement of the EDA "Authority Grant" to Block 52 Holdings, LLC - Block 52
Mixed Use Development in the amount of $290,000
6. Other Business
A. Consideration of Economic Development Manager's Report
7. Adjournment
EDA Agenda: 4/10/2024
3A. Consideration of Approving Payment of Bills
Prepared by:
Meeting Date:
❑ Regular Agenda Item
Community & Economic Development
4/10/2024
❑x Consent Agenda Item
Coordinator
Reviewed by:
Approved by:
N/A
Economic Development Manager
REFERENCE AND BACKGROUND:
Accounts Payable summary statements listing bills submitted during the previous month are
included for review.
ALTERNATIVE ACTIONS:
1. Motion to approve payment of bills through March 2024.
2. Motion to approve payment of bills through March 2024 with changes as directed by
the EDA.
STAFF RECOMMENDATION:
Staff recommend approval of Alternative 1.
SUPPORTING DATA:
• Accounts Payable Summary Statements for March.
Accounts Payable
Transactions by Account
User: julie.cheney
Printed: 03/06/2024 - 3:15PM
Batch: 00301.03.2024
Account Number
Vendor
Description
Monticello
GL Date Check No
Amount PO No
213-46301-430400
KENNEDY AND GRAVEN CHAR]
Acquisition 118 Broadway Ave E - Jar
03/12/2024
128235
1,534.00
213-46301-430400
KENNEDY AND GRAVEN CHAR]
7th Street W Parcel Acquisition from 1
03/12/2024
128235
258.00
213-46301-430400
KENNEDY AND GRAVEN CHAR]
General EDA- Abatement - Jan 2024
03/12/2024
128235
46.00
213-46301-430400
KENNEDY AND GRAVEN CHAR]
Deephaven GMHF Loan - Jan 2024
03/12/2024
128235
2,154.00
213-46301-430400
KENNEDY AND GRAVEN CHAR]
General EDA- Jan 2024
03/12/2024
128235
588.00
213-46301-430400
KENNEDY AND GRAVEN CHAR]
Facade Forgivable Loan Program - Jar
03/12/2024
128235
1,499.00
Vendor Subtotal: 6,079.00
213-46301-433100 JAMES THARES Mileage Reimbursement (81 miles) -1 03/12/2024 0 54.27
Vendor Subtotal: 54.27
Subtotal for Fund: 213 6,133.27
Report Total: 6,133.27
AP -Transactions by Account (03/06/2024 - 3:15 PM) Page 1
Accounts Payable
Transactions by Account
User: julie.cheney
Printed: 04/01/2024 - 12:51PM
Batch: 00203.03.2024
Account Number
Vendor Description
Monticello
GL Date Check No Amount PO No
213-46301-431990 WSB & ASSOCIATES INC Block 34 216 Pine St Phase 1 Surveys 03/26/2024 0 234.75
Vendor Subtotal: 234.75
213-46301-431993 WSB & ASSOCIATES INC 2024 Economic Development Service; 03/26/2024 0 1,476.00
Vendor Subtotal: 1,476.00
Subtotal for Fund: 213 1,710.75
Report Total: 1,710.75
AP -Transactions by Account (04/01/2024 - 12:51 PM) Page I
Accounts Payable
Transactions by Account
User: julie.cheney
Printed: 03/19/2024 - 3:40PM
Batch: 00205.03.2024
Account Number
Vendor
Description
Monticello
GL Date Check No
Amount PO No
213-46301-433100
US BANK CORPORATE PMT SYS
CMMA - CMMA Jan Meeting 03/15/2024
0
20.00
Vendor Subtotal:
20.00
213-46301-438200
CITY OF MONTICELLO
7256-004 - 130 Brdwy- Stormwtr 03/15/2024
0
31.50
213-46301-438200
CITY OF MONTICELLO
7256-015 - 216 Pine St - EDA 03/15/2024
0
52.61
Vendor Subtotal:
84.11
213-46301-443990
US BANK CORPORATE PMT SYS
MONTICELLO CHAMBER OF CON 03/15/2024
0
20.00
213-46301-443990
US BANK CORPORATE PMT SYS
DOMINOS - Food for EDA Meeting 03/15/2024
0
36.48
Vendor Subtotal:
56.48
Subtotal for Fund: 213
160.59
Report Total:
160.59
AP -Transactions by Account (03/19/2024 - 3:40 PM) Page 1
Accounts Payable
Transactions by Account
User: julie.cheney
Printed: 04/01/2024 - 12:49PM
Batch: 00204.03.2024
Account Number
Vendor Description
Monticello
GL Date Check No Amount PO No
213-46301-431991 DEMVI LLC Parking Lot Maintenance - March 202 03/31/2024 0 213.86
Vendor Subtotal: 213.86
213-46301-438100 CENTERPOINT ENERGY 12045691-8 - 216 Pine St (EDA) 03/31/2024 0 281.43
Vendor Subtotal: 281.43
213-46301-438100 XCEL ENERGY 14698960-5 - 101 E 3rd St (Finders Ki 03/31/2024 0 62.75
Vendor Subtotal: 62.75
Subtotal for Fund: 213 558.04
Report Total: 558.04
The preceding list of bills totaling $8,562.65 was approved for payment.
Date: 4/10/24 Approved by:
Hali Sittig - Treasurer
AP -Transactions by Account (04/01/2024 - 12:49 PM) Page I
MINUTES
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, October 25, 2023 — 7:00 a.m.
Bridge Room, Monticello Community Center
Commissioners Present: Vice President Jon Morphew, Treasurer Hali Sittig, 011ie
Koropchak-White, Rick Barger, Councilmember Tracy Hinz, Mayor
Lloyd Hilgart
Members Absent: President Steve Johnson
Staff Present: Jim Thares, Rachel Leonard, Angela Schumann, Ron
Hackenmueller, Hayden Stensgard
1. General Business
A. Call to Order
Vice President Jon Morphew called the regular meeting of the Monticello EDA to
order at 7:01 a.m.
B. Roll Call 7:00 a.m.
Mr. Morphew called the roll.
2. Consideration of Additional Agenda Items
None
3. Public Hearing
None
4. Regular Agenda
A. Consideration of Accepting the 2023 Housing Market Study prepared by MSA
Professional Services
Jim Thares, Economic Development Manager, provided an overview of the agenda
item. Angela Schumann, Community Development Director then introduced Jason
Valerius of MSA -PS.
Mr. Valerius provided an overview of the 2023 Housing Study highlighting several
points.
Within the City of Monticello, owner units that are planned or constructed have
reached 288 since 2020. These are primarily on the outer edges of the city limits.
Rental units planned or constructed totals 595.
Since 2020, the growth of household units is on track with the 2040 Comprehensive
Plan projections and is expected to continue increasing with a correlated unit
demand for a variety of households. The latest census figures show that Wright
County is exceeding the number of household units versus the number of housing
units added. This is problematic as it indicates a decrease in vacancies and an
increase in competition for housing units.
Mr. Valerius noted that 12% of rental households within the city are 1 -unit
detached, while 28% are 1 -unit attached. Most rental costs are over $1000 per
month. The demand for rental units equal to or under $500 is in short supply. These
tend to be occupied by tenants earning about $20,000 +/- per year.
Over 52% of rental units in Monticello are 1 -bedroom units, leaving 48% as larger
units. Over the past 5 years, there is a greater demand for 3 -bedroom units.
Mr. Valerius continued to review the report highlighting the Monticello ownership
market.
The Monticello affordability limit for median household is $290,000. The cost of
ownership of single-family homes has been influenced by increased interest, rising
cost of materials, and an increase in property taxes. This increase is higher in
Monticello than in peer communities and the affordability of starter homes is just
beyond the threshold of the median income.
The trend for aging populations is that they prefer to stay in owner -occupied units as
long as they can, eventually moving into senior living for easier upkeep.
The building trend is for the majority of single-family homes that range from
$250,000 to $300,000, followed by $300,000-$350,00. An increase in multi -unit
construction gives options to households which further encourages growth.
Monticello's Development fees are on the higher end compared to peer cities. The
fees cannot be compared apples to apples as each community has different charges
rolled into its development fees.
Discussion was held to consider the target entry of new construction and the need
for executive housing. Mayor Hilgart challenged the rate Monticello is growing,
suspecting that it might be a bit faster. Mr. Valerius confirmed the trends support
the data presented.
Ms. Schumann stated that this report is research and to be used as a tool for the
EDA to write policy. Ms. Schumann asked members to consider their housing
priorities in each of the areas provided in the report. Staff are hoping to schedule a
future joint meeting with the City Council again to dive into the Housing Study
findings, allow an opportunity for sharing of EDA members' thoughts regarding
priority housing work objectives, and exploring potential policy in early 2024.
B. Consideration of Authorizine a Phase I Environmental Site Assessment (ESA) for
Outlot A, Great River Second Addition, 14.16 acres along 7th Street West by WSB &
Associates in the amount of $4,800
Mr. Thares provided an overview of the agenda item. In consideration of the
acquisition of a vacant 14.16 -acre commercial parcel of land along 7th Street West
from Riverwood Bank, staff are asking the EDA to authorize a Phase I ESA to get an
understanding of the environmental status of the site. The cost of such a report
from WSB is $4,800.
LLOYD HILGART MOVED TO APPROVED AUTHORIZING A PHASE I ENVIRONMENTAL
SITE ASSESSMENT (ESA) FOR OUTLOT A, GREAT RIVER SECOND ADDITION, 14.16
ACRES ALONG 7T" STREET WEST BY WSB & ASSOCIATES IN THE AMOUNT OF $4,800.
HALI SITTIG SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 7-0.
5. Other Business
A. Consideration of Economic Development Manager's Report
Mr. Thares provided an overview of the agenda item.
No action was taken on the item.
6. Adjournment
HALI SITTIG MOVED TO ADJOURN THE OCTOBER 25, 2023, REGULAR MEETING OF THE
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UNANIMOUSLY. MEETING ADJOURNED AT 8:17 A.M.
MINUTES
JOINT CITY COUNCIL/ECONOMIC DEVELOPMENT AUTHORITY JOINT WORKSHOP MEETING
Wednesday, March 13, 2024 — 5:00 p.m.
North Mississippi Room, Monticello Community Center
EDA Members Present: President Steve Johnson, Vice President Jon Morphew, Treasurer
Hali Sittig, 011ie Koropchak-White, Rick Barger
Councilmembers Present: Mayor Lloyd Hilgart, Charlotte Gabler, Lee Martie
Councilmembers Absent: Sam Murdoff, Tracy Hinz
Staff Present: Rachel Leonard, Jim Thares, Angela Schumann, Sarah
Rathlisberger, Hayden Stensgard, Tammy Omdal (Northland
Securities Public Finance)
1. Call to Order
EDA President Steve Johnson called the Joint Workshop of the Monticello Economic
Development Authority (EDA) and City Council to order at 5:00 p.m.
Mr. Johnson called the roll.
2. Outlot C. Featherstone 6th Addition Development & Assistance Concent Review
Community Development Director Angela Schumann provided an overview of the
purpose of the meeting and introduced the applicant team to the EDA, City Council, and
the public. The purpose of the meeting was to introduce a potential project to the EDA
and City Council as future considerations by both bodies would be needed in connection
with the development.
Jim Vos, a representative of Silas Partners, LLC., addressed the EDA, City Council, and
the public. Stellis Health is interested in building a new facility in Monticello to serve as
not only their eventual new clinic space, but also an ambulatory surgery center on an
89 -acre parcel of land bounded by Highway 25 to the West and 85th Street NE to the
South. Stellis has indicated their needs for the site are limited to 25 +/- acres. It was the
group's plan to apply for business subsidy through the City for the public infrastructure
internal to the site, to make the remaining developable land marketable to businesses
that wish to come and build in Monticello. Potential users include those that would
reflect the majority of allowed uses in the Industrial & Business Campus District (IBC),
along with some regional commercial uses.
Dr. Jason Halverson, President of Stellis Health, addressed the EDA, City Council, and the
public. Dr. Halverson noted that when a patient needs to have same day surgery in the
Monticello area, closest two options are either Maple Grove or St. Cloud. Providing an
ambulatory surgery center in Monticello would eliminate a regional gap for care.
EDA Treasurer Hali Sittig asked if given the closing of the Stellis Health location in
Albertville was directly related to staffing issues, is Stellis Health confident there will not
be a staffing issue at this new location in Monticello. Brent Wilde, CEO of Stellis Health,
said there is no concern that this new location would have issues with staffing because it
will provide for the ability to have multiple types of care options and needs to provide
that care under one roof. When certain care needs are provided at one location, and
others provided elsewhere, it makes it difficult for providers to give efficient care.
Councilmember Charlotte Gabler asked if anything changes for the potential uses that
would be on the land guided Light Industrial Park to the south of the subject site. Ms.
Schumann said it would not.
011ie Koropchak-White asked for clarification on whether Stellis Health would move
their existing clinic location in Monticello to the new site. The group confirmed.
Mayor Lloyd Hilgart asked what cities Stellis Health is currently located in. Stellis Health
team members responded that they are currently located in Monticello and Buffalo.
Mr. Johnson asked if the development group conducted a market study prior to deciding
on the subject location. Mr. Wilde confirmed that a market study was conducted, and
the response was overwhelming with interest for a facility like this opening up in the
area.
Mayor Hilgart asked if Stellis Health planned to move out of their Buffalo location. The
group said they did not plan to do that with this proposed development.
Mayor Hilgart asked how many employees would be anticipated with the first phase of
development. Mr. Vos said that the 25,000 square foot ambulatory surgery center
would bring roughly 25-30 jobs initially.
Rick Barger asked what the timeline of the development is. Mr. Vos said that the first
phase, the 25,000 square foot ambulatory surgery center, would potentially break
ground in the Spring of 2025.
Executive Director of the EDA Jim Thares provided an overview of the Business Subsidy
process with the City of Monticello, for the purposes of a potential application for Tax
Abatement. Ms. Schumann noted to the group that Tax Increment Financing (TIF) was
not an eligible source of subsidy for this type of development.
Tammy Omdal, Northland Securities Public Finance, addressed the group. She noted the
main reason for the eventual ask for business subsidy is being driven by the public
infrastructure that would be needed to serve this development.
Mayor Hilgart asked if the development team can ask the County and School District for
tax abatement. Ms. Omdal confirmed, but that would be separate from the City's
participation in tax abatement.
No action was taken on the item.
3. Adjournment
OLLIE KOROPCHAK-WHITE MOVED TO ADJOURN THE JOINT WORKSHOP MEETING OF
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MOTION CARRIED UNANIMOUSLY, MEETING ADJOURNED AT 5:58 P.M.
MINUTES
REGULAR MEETING - ECONOMIC DEVELOPMENT AUTHORITY (EDA)
Wednesday, March 13, 2024 — 6:00 p.m.
Mississippi Room, Monticello Community Center
JOINT ECONOMIC DEVELOPMENT AUTHORITY AND CITY COUNCIL WORKSHOP MEETING
5:00 p.m. Business Subsidy Pre -Application Review
Members Present: President Steve Johnson, Vice President Jon Morphew, Treasurer Hali
Sittig, 011ie Koropchak-White, Rick Barger, Mayor Lloyd Hilgart
Members Absent: Councilmember Tracy Hinz
Staff Present: Executive Director Jim Thares, Angela Schumann, Matt Leonard
1. General Business
A. Call to Order
Mr. Johnson called the regular meeting of the Monticello EDA to order at 6:07 p.m.
B. Roll Call 6:00 a.m.
Mr. Johnson called the roll.
2. Consideration of Additional Agenda Items
Mr. Johnson added an item to the agenda that would be presented after the first item
of the regular agenda. City Engineer/Public Works Director Matt Leonard was present to
provide an update regarding the City wells located on Block 34.
3. Consent Agenda
A. Consideration of Payment of Bills
B. Consideration of Approving Workshop Meeting Minutes — January 10, 2024
C. Consideration of Approving Regular Meeting Minutes —January 24, 2024
D. Consideration of Approving Workshop Meeting Minutes — February 14, 2024
E. Consideration of Approving Regular Meeting Minutes — February 14, 2024
F. Consideration of Resolution No. 2024-04 supporting Wright County Economic
Development Partnership (WCEDP) in its Childcare Funding Grant Application
LLOYD HILGART MOVED TO APPROVE THE EDA MARCH 13, 2024, REGULAR MEETING
CONSENT AGENDA. HALI SITTIG SECONDED THE MOTION. MOTION CARRIED
UNANIMOUSLY, 6-0
4. Public Hearing
None
5. Regular Agenda
A. Consideration of Business Subsidv Pre-Aaalication Review — Silas Partners Pr000sal
Executive Director Jim Thares provided an overview of the agenda item to the EDA
and the public. In connection with the joint workshop meeting of the EDA and City
Council that occurred before the regular meeting, the EDA was asked to provide
their support for Silas Partners to formerly submit a business subsidy application for
Tax Abatement.
Jim Vos, of Silas Partners, addressed the EDA and the public. Stellis Health has
conceptually proposed a new facility to be built at a location in Monticello bounded
by Highway 25 to the West, and 85th Street NE to the south. Mr. Vos noted that the
current site is roughly 89 acres, and the Stellis Health campus only requires 25 +/-
acres. The business subsidy application would be for assisting with installation of the
public infrastructure on the site for the remainder of the site to be sold and
developed separately.
OLLIE KOROPCHAK-WHITE MOVED TO RECOMMEND THAT THE SILAS PARTNERS
PROPOSAL CONTINUE FORWARD WITH FURTHER STEPS TO BRING A COMPLETE
FINAL BUSINESS SUBSIDY TAX ABATEMENT APPLICATION BACK TO THE EDA FOR
FINAL REVIEW AT A FUTURE MEETING. HALI SITTIG SECONDED THE MOTION.
MOTION CARRIED UNANIMOUSLY, 6-0.
Ardpd Item
1. Consideration of an update from City Engineer/Public Works Director regarding
City wells on Block 34 and EDA owned property along Palm Street and 4th Street
East.
City Engineer/Public Works Director Matt Leonard provided an overview of the
added agenda item to the EDA and the public. The City is currently in the design
phase for a new Water Treatment Plant. A part of the design phase includes locating
potentially new locations within the City for wells and relocation/removal of existing
wells. One of the future sites identified for well locations in the City included the
EDA's property along Palm Street and 4th Street East. While considering the
relocation of the two existing wells on Block 34, the EDA's property was identified as
a potential location that would closely match the current production of those wells.
Mr. Leonard requested permission from the EDA to conduct tests on the property
for further research that would help the City better understand the potential of that
location for wells in the future.
Mayor Hilgart asked if the EDA's property could potentially have two wells on site.
Mr. Leonard said that was a possibility.
Mayor Hilgart asked if those potential well locations would be able to replace the
capacity of those on Block 34, would the City decommission those two existing wells
prior to them beginning to fail. Mr. Leonard said that is something that would be
further discussed as the design continues.
By consensus, the EDA granted permission to conduct tests on the Palm Street
properties related to well locations.
B. Consideration of Resolution No. 2024-05 Rescinding a Contract for Private
Develoament (Washburn Comouter GrouD Exoansion) and Tax Increment
Financing District No. 1-44
Mr. Thares provided an overview of the agenda item to the EDA and the public. The
EDA adopted a TIF Plan for TIF District 1-44 in April 2022 in relation to a plan for
Washburn Computer Group to expand their current facility at the corner of Chelsea
Road and Fallon Avenue NE. The EDA attorney noted that sufficient time had passed
since the approval of the district with no development occurring where reapproval
of the district and plans for development would be necessary.
HALI SITTIG MOVED TO ADOPT RESOLUTION 2024-05, RESCINDING APPROVAL OF
CONTRACT FOR PRIVATE DEVELOPMENT AND TIF DISTRICT NO. 1-44. JON
MORPHEW SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0.
6. Other Business
A. Consideration of Economic Development Manager's Report
Mr. Thares provided an overview of the agenda item to the EDA and the public.
No action was taken on the item.
7. Adjournment
HALI SITTIG MOVED TO ADJOURN THE REGULAR MEETING OF THE MONTICELLO EDA.
RICK BARGER SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY, 6-0.
MEETING ADJOURNED AT 6:52 P.M.
EDA Agenda: 04/10/2024
5A. Consideration of Tax Abatement Application from Monticello Hospitality Group, LLC —
Fairfield by Marriott Hotel and Restaurant Develoament Proposal
Prepared by:
Meeting Date:
❑x Regular Agenda Item
Economic Development Manager
04/10/2024
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Finance Director, Community &
Economic Development Coordinator
ACTION REQUESTED
1. Motion to adopt Resolution EDA -2024-07 recommending that the City Council authorize the
use of Tax Abatement in support of a 98 -Room Fairfield by Marriott Hotel with a Restaurant
development proposal by Monticello Hospitality Group, LLC
2. Motion of other, including findings to be made by the EDA
PREVIOUS EDA ACTION
March 27, 2024: The EDA reviewed the 98 -room Fairfield Mariott Hotel Development Tax
Abatement Pre -Application submittal by Monticello Hospitality Group,
LLC. After having various questions answered by the developer, the EDA
voted to recommend submission of a formal Tax Abatement application
for review at an upcoming meeting.
REFERENCE AND BACKGROUND
The EDA is asked to review and make a recommendation on a formal Tax Abatement
application for a hotel and restaurant development proposal by Monticello Hospitality Group,
LLC. Monticello Hospitality Group, LLC is seeking to fill a gap in its financing through the use of
Tax Abatement, supporting their efforts to secure lender financing for the project.
Monticello Hospitality Group 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 District (PCD) development and zoning district. A 6,200 sq. ft., 130 seat
attached restaurant is incorporated into the development project through a connecting
breezeway link from the hotel structure. The proposed uses are in alignment with the PCD
zoning. The development proposal is expected to create about 42 +/- new jobs.
EDA Agenda: 04/10/2024
Monticello Hospitality Group, LLC is requesting a 10 -year Tax Abatement from the City. In
addition, the developer is also asking Wright County to consider a similar Tax Abatement
assistance request.
As noted in the City Tax Abatement Policy (October 2023), the Public Purpose of Abatement is:
• Encourage desirable development or redevelopment within the City that would not
occur but for the Abatement
• Leverage Abatement and other public dollar to maximize private sector investment in
the City
For the hotel development proposal the applicable "Policy" goals for Abatement consist of:
✓ Retaining or creating living wage jobs
✓ Enhancing or diversifying the economy based on demonstrated need
✓ Encouraging high quality commercial or industrial development through private
investment
✓ Improving the quality of life of City residents by providing a desirable good or service
Northland Securities, the City and EDA financial advisor, has completed an analysis of the Tax
Abatement assistance request and provided a summary overview Memorandum ("Memo")
with findings and a recommendation. As noted in the Northland memo, the public purpose of
the Tax Abatement assistance is to increase or preserve the tax base and support economic
development activity in the City.
In addition to the increase in tax base and economic development activity in the city, generally
the proposed development fulfills a demonstrated need in the community. The 2023 Hotel
Market Study commissioned by the EDA (summer of 2023), indicated that potential hotel
business was not captured by the existing mix of hotels in the city. In particular, the Study
noted that business travelers were not staying at the existing Monticello hotels and instead
chose to stay at higher level hotels in Albertville or Maple Grove. To address this, the study
recommended that the City -EDA should strive to attract an upper midscale quality hotel with 80
+/- rooms. It further stated that a new hotel proposal may likely need some form of financial
assistance to be viable (Exhibit D). The proposed Fairfield by Marriott hotel and restaurant
development should help to mitigate that market deficiency.
Using the evaluation structure developed for tax abatement requests, a staff review of the
proposal carries a tally of 36, similar to the UMC and Wiha Tool expansion development scores.
Key factors in the score relate to the tax base increase per acre, number of new jobs per acre,
low level of public sector funding per job, and leveraging of private sector investment (48:1).
The community benefit to address a market deficiency also added to the score.
EDA Agenda: 04/10/2024
In terms of the financial evaluation of the request, the Northland Memo includes several
exhibits showing the Projected Cash Flow from Tax Abatement, a Funding Sources and Uses for
the development, and Preliminary Financial Proforma with investment returns during the
requested 10 -year period. The Northland analysis illustrates City and County abatement
projections. As shown in the Proforma, it appears that the proposed project will likely struggle
to achieve an acceptable industry standard rate of return without tax abatement from the City,
and the County. As a result, without Tax Abatement assistance, the proposal may not secure
desired lender financing.
The developers have indicated that the total cost of the development proposal is approximately
$18,450,000. The County Assessor is estimating that the finished project (both hotel and
restaurant) will have a taxable market value of $6,365,000 (a 1% annual increase in value is
projected through the proposed term of the Tax Abatement assistance. The Cash Flow
Projections exhibit indicates a potential City Tax Abatement totaling $378,515 over a 10 -year
period based on the projected taxable market value.
It should also be noted that under Minnesota state statutes, cities (and counties) are the
authorizing entity for Tax Abatement, not EDAs. As per the recently adopted Policy, the EDA's
role is to review applications for Tax Abatement assistance and provide recommendations to
the City Council for final consideration. Should the request continue forward, the applicant will
be asked to continue to supplement their application for Council consideration, a public hearing
will be required, and staff will work with the applicant and EDA attorney on preparation of the
abatement agreement.
Representatives of Monticello Hospitality Group, LLC will be at the meeting to review the
proposal and answer questions that the EDA may have regarding the development and request
for Tax Abatement assistance.
Budget Impact: The budget impact related to the Tax Abatement application submittal
is minimal. The developer submitted the Final Application escrow deposit fee of
$10,000. Those funds will be used to pay for legal fees and financial analysis review
performed by Northland Securities. The City Attorney has requested the EDA attorney
prepare the necessary legal documents for the Council's consideration.
If the City Council were to approve the abatement, the projected impact as shown in the
Northland memo, averages approximately $37,000 per year (which is about 0.28% of
the City's 2024 property tax levy) through the life of the abatement. As a reminder to
the EDA, the City must levy funds sufficient to reimburse the abatement amount.
II. Staff Workload Impact: Staff involved in the review steps of the hotel proposal Tax
Abatement assistance application consists of the City Administrator, Community
Development Director, Finance Director, and Economic Development Manager.
EDA Agenda: 04/10/2024
External staff involved in the review consist of Northland Securities staff and legal
counsel from Kennedy & Graven
Comprehensive Plan Impact: The hotel's proposal relationship to the Monticello 2040
Vison + Plan aligns with goals related to Business Attraction and Retention, and Tax Base
Expansion. Additionally, proactive utilization of key development tools is noted
important to create a strong, economically vibrant local economy which includes steps
or activities -projects that will address market deficiencies (the 2023 Hotel Study noted
the need for a new upper midscale hotel with 80 to 100 rooms to retain and attract
more business travelers versus seeing them leave to stay in hotels in other nearby
communities). Further, the proposed uses align well with the vision and uses established
for The Pointes at Cedar.
STAFF RECOMMENDATION
Staff supports a recommendation for Council approval of the requested Tax
Abatement assistance from Monticello Hospitality Group, LLC. Staff's recommendation is based
on the Northland analysis and the findings of the EDA commissioned Hotel Market Study, as
well as consistent with the City's adopted Tax Abatement Policy goals. If the EDA recommends
approval of the Tax Abatement assistance, it will be presented to the City Council for
consideration at an upcoming meeting.
SUPPORTING DATA
A. Resolution No. 2024-07
B. Tax Abatement Application — Fairfield Marriott Hotel Development
C. Northland Securities Memo
D. Aerial Photo - Proposed Development Site
E. Tax Abatement Policy
F. Abatement Evaluation Criteria
G. 2023 Hospitality Study
H. Hotel Finance Interest
I. Site Plan
J. Floor Plans
K. Exterior Renderings
L. Economic Development Goals
M. GNP Development References
N. Executed Contribution Agreement
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
CITY OF MONTICELLO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2024-07
SUPPORTING A PROPERTY TAX ABATEMENT FOR CERTAIN
PROPERTY IN THE CITY AND A TAX ABATEMENT AND
BUSINESS SUBSIDY AGREEMENT WITH MONTICELLO
HOSPITALITY GROUP, LLC
WHEREAS, Monticello Hospitality Group, LLC, a Minnesota limited liability company, or an
affiliate thereof or an entity related thereto (the "Developer"), has submitted an application (the
"Application") to the City of Monticello, Minnesota (the "City") for a property tax abatement (the
"Abatement") for certain real property located at on the southwest quadrant of the intersection of Chelsea
Road and Edmonson Avenue in the City (the "Property") pursuant to Minnesota Statutes, Sections
469.1812 through 469.1815, as amended (the "Abatement Act"), to assist in financing a portion of the
cost of acquiring, constructing and equipping a four-story, 98 -room hotel with an indoor pool, meeting
space, exercise area, attached restaurant and related amenities and facilities (the "Project"); and
WHEREAS, pursuant to the City's Tax Abatement Policy (the "Policy"), adopted by the City
Council of the City (the "City Council") on October 23, 2023, the Board of Commissioners (the "Board")
of the Monticello Economic Development Authority (the "Authority") shall consider all tax abatement
applications in the City and make a recommendation to the City Council on whether or not to grant such
abatements;
WHEREAS, the Application has been presented to the Board and the Board has reviewed the
Application and the Developer's proposal for the Project and information regarding the proposed
Abatement; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the City of
Monticello Economic Development Authority as follows:
1. The Authority find that the Abatement complies with the Policy and supports the use of the
Abatement to assist the Developer with financing a portion of the extraordinary development costs of the
Project.
2. The Authority supports granting the Abatement to the Developer; provided, however, that
final authorization of abatement assistance for the Project shall be detailed in a future Tax Abatement and
Business Subsidy Agreement, by and between the City and the Developer (the "Agreement"), and the
approval of the Abatement and the Agreement is solely within the discretion of the City Council following
all proceedings required pursuant to the Abatement Act.
Approved this April 10, 2024 by the Board of Commissioners of the Monticello Economic
Development Authority.
President
ATTEST:
Secretary
MN190\101\944379.v1
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 and a Branded 130 seat
Restaurant on property in 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 & Suites 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 Application.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
4-5-24
Jim Thares
City Of Monticello
Employment for New Development for the Monticello Hospitality Group
Fairfield inn & suites By Marriott
General Manager (1 FT) -------------------$70,000
- $75,000
Assistant Manager(1 FT) -------------------
$ 40,000- 50,000
Front Office Manager (1 FT) ---------------$40,000
— 43,000
Front Desk (4 FT) ------------------------------$35,000-
40,000
Night Auditor (1 FT)--------------------------$
$40,000- 45,000
Chief Engineer (1 FT) ----------------------$
47,000
Maintenance technicians (2 -PT)---------
$18-22 per hour
Laundry (1) -------------------------------------$ 20- 22 per hour
Breakfast/kitchen (2 PT) ---------------------$20-25
per hour
Housekeeping ( 8-12 PT)--------------------
$18-25 per hour
Groundskeeper (2-3 PT)---------------------
$ 20-25 per hour
Restaurant
General Manager (1 FT)------------------
$55,000-65,000
Assistant Manager(1 ft) ---------------------------
$ 40,000- 45,000
Bar Manager (1 FT) ---------------------------------$45,000
— 50,000
Kitchen manager(1FT)---------------------------- $ 45,000- 50,000
Line cooks (2-4 FT) ---------------------------------
$ 22 -25 per hour
Servers ( 10 FT) --------------------------------------$
25 per hour with tips
Dishwasher ( 2 FT) ----------------------------------$
18-22 per hour
Prep and expo ( 4-6 PT) ----------------------------$18-
22 per hour
Maintenance/ cleaning (2 FT) ------------------
$ 20 -25 per hour
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
BUSINESS SUBSIDY APPLICATION
BUSINESS ASSISTANCE FINANCING
Legal name of applicant:
Address:
Telephone number:
Name of contact person:
Monticello Hospitality Group, LLC
1910 42,d Ave West, Suite 300 Alexandria, MN 56308
612-812-1563 (Rob) & 701-361-3734 ( Ted C)
Rob Thompson or Ted Christianson
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
1. A map showing the exact boundaries of proposed development.
2. Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion.
3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned.
4. A statement identifying how the increment assistance will be used and why it is necessary to
undertake the project.
5. A statement identifying the public benefits of the proposal including estimated increase in
property valuation, new jobs to be created, hourly wages and other community assets.
6. A written description of the developer's business, principals, history and past projects
I understand that the application fee will be used for EDA staff and consultant costs and may be partially
refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA
Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If
the initial application fee is insufficient, I will be responsible for additional deposits.
SIGNATURE
Applicant's signature:
Date: y ` '?y
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
Application for Business Assistance Financing
GENERAL INFORMATION:
Monticello Hospitality Group, LLC
Business Name: Date:
1910 42nd Ave West, Suite 300 Alexandria, MN 56308
Address:
Type (Partnership, etc.): Limited Liability Company
Authorized Representative:
Description of Business:
3-1-24
Rob Thompson or Ted Christianson 612-812-1563 (Rob)
Phone: 701-361-3734 (Ted)
98 room Fairfield Inn & Suites By Marriott and Restaurant and 130 Seat
Restaurant
Legal Counsel: Amy Clark- Smith and Strege, LTD.
321 Dakota Avenue I PO Box 38
Address: Whapeton , ND
FINANCIAL BACKGROUND:
1. Have you ever filed for bankruptcy?
NO
2. Have you ever defaulted on any loan commitment?
Phone:
701-642-2668
In the Process with Sarah Kortmansky
3. Have you applied for conventional financing for the project? Of North Star Bank
4. List financial references:
Corey Simonson — First Western Bank, Alexandria, MN 320-760-6374
a.
b. Craig Olson — Bremer Bank, Alexandria, MN, 320-815-1126
2
Jon Kretchman — JBK Funding, Fatgo, ND 701-371-6487
C.
Yes
5. Have you ever used Business Assistance Financing before?
The Rune in Alexandria with AAEDC, Hatchery Row in Battle Lake
MN with their EDA. Both projects are under construction and used
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:
2. Amount of Business Assistance requested?
Abatement of taxes for 15 years of maximum time
allowed
The abatement will assist in providing a feasible investment return
and help in obtaining Bank Financing. Additionally the
abatement would provide the project flexibility to incorporate the
3. Need for Business Assistance: requested design features in the Pointes at Cedar District
4. Present ownership of site: DeepHaven
30+
5. Number of permanent jobs created as a result of project?
$0 currently
6. Estimated annual sales: Present: Year 1 - $2,500,000 Future:
7. Market value of project following completion: Approximately 18 million
June 2024
8. Anticipated start date:
FINANCIAL INFORMATION:
1. Estimated project related costs:
a. Land acquisition
b. Site development
c. Building cost
d. Equipment
e. Architectural/engineering fee
$ 1,000,000
650,000
12,850,000
2,500,000
425,000
3
Year 5 $4,000,000
Completion Date: May 2025
f. Legal fees
g. Off-site development costs/soft costs
2. Source of financing:
a. Private financing institution
b. Tax increment funds
c. Other public funds
d. Developer equity
55,000
1,910,000
$ 75% or approximately
$13,500,000
Abatement doesn't provide
any cash up front
25%- or approximately
$4,500,000
4
PLEASE INCLUDE:
1. Preliminary financial commitment from bank. 75% of project costs
2. Plans and drawing of project. Exhibit 1
3. Background material of company.Exhibit 2
4. Pro Forma analysis. Exhibit 3
5. Financial statements.
6. Statement of property ownership or control. Exhibit 4
7. Payment of application fee of $250.00
1(7 northland
Public Finance
MEMORANDUM
To: Jim Thares, City of Monticello
From: Tammy Omdal, Managing Director
Date: April 4, 2024
Re: Tax Abatement Assistance for Hotel/Restaurant Project
Northland completed a review and analysis of the application for Tax Abatement assistance
summitted by Monticello Hospitality Group, LLC (the "Developer") to the City of Monticello (the
"City"). This memorandum includes a summary of the review and analysis.
The proposed project by the Developer includes a 98 -room Fairfield Inn & Suites by Marriott and
130 -seat restaurant (the "Project"). The Wright County Assessor has provided a preliminary
indication of taxable market value of $6,365,000 for the Project. The valuation for taxes payable will
be determined by the Assessor after project completion and may vary from the preliminary estimate.
The maximum City Tax Abatement assistance that may be available to assist the Project over a 10 -
year period is approximately $378,500 (future value), assuming exclusion of the base (current) value
of the property. The average annual amount of the Tax Abatement is approximately $37,000 per year.
Public Purpose
The proposed public purpose of the Tax Abatement assistance for the Project, which will be a
business subsidy under Minnesota law, is to increase or preserve the tax base and to create and
support economic development activity in the City.
The application from the Developer states, in part, that the Tax Abatement is necessary to provide a
feasible investment return and help in obtaining bank financing. Additionally, the Developer states
that the Tax Abatement will provide the Project with financial flexibility to incorporate the City's
requested design features in the Pointes at Cedar District. The Developer is continuing to refine their
pro forma and assumptions.
The Developer has provided the City with pro forma for the Project. Based on the information
provided and the assumptions used by the Developer (inclusive of estimated vacancy rates and
financing terms, among other information), Northland is of the opinion that the Project, without Tax
Abatement assistance, is projected to produce a rate of return that is below what we would consider
to be within industry standards. Northland estimates that with Tax Abatement the Project may
achieve reasonable returns for a hotel/restaurant development and debt service coverage ratio which
suggest the Project may be bankable. We have not received documentation from the Developer to
show a financing commitment.
Northland Securities, Inc. 150 South Fifth Street, Suite 3300, Minneapolis, MN 55402, Main Tel. 612-851-5900
www.northlandsecurities.com I Member FINRA and SIFC I Registered with SEC and MSRB
Monticello Tax Abatement
April 4, 2024
Page 2
The Developer has continued to work on their pro forma. Estimates prepared by Northland and our
opinion on the need for financial assistance for the Project may be impacted by revised information
the Developer may present.
The Developer is planning to request a Tax Abatement from Wright County. The Northland analysis
includes assumption for both a City approved Tax Abatement and a County approved Tax
Abatement. The County approval of a Tax Abatement is independent of the City approval of a Tax
Abatement.
Tax Abatement
The name "tax abatement" is misleading. The enabling statute (Minnesota Statutes, Sections 469.1812
to 469.1815) does not authorize the actual "abatement of taxes". Instead, the respective taxing
jurisdiction, city, county, and school district, can levy a property tax (an abatement levy) that is
equivalent to taxes that could be abated by these taxing jurisdictions.
To provide Tax Abatement assistance, the City will need to consider approval of the Tax Abatement
following a public hearing. The City may consider approval of a Development Agreement with the
Developer after the public hearing and after the City Council adopts a resolution authorizing the Tax
Abatement. The authorizing resolution must include certain findings and specify the term (number
of years) and maximum amount for the Tax Abatement, among other items. The proposed assistance
to the Developer is on a pay -go basis. This means that the City would make semi-annual payments to
the Developer, pursuant to terms of the Development Agreement, based on the City's receipt of
property tax payments.
Northland has prepared preliminary estimates for the Tax Abatement that may be available from the
Project. The estimated Tax Abatement is based on tax abatement equal to the increase in City
property taxes from the estimated increased taxable market value from the Project.
Attachments
Attached to this memo are the following reports:
• Exhibit A: Estimated City and County Tax Abatement Based on Ten -Year Term.
• Exhibit B: Source and Use of Funds For Construction, Prepared by Northland based on
information provided by the Developer.
• Exhibit C: Project Pro Forma, Prepared by Northland based on information provided
by the Developer and information prepared independently by Northland.
Exhibit A
City of Monticello
Hotel with Restaurant Project
Projected Cash Flow from Tax Abatement
TIF
District
Year
Taxes
Payable
Year
Taxable
Market Value
(TMV)
Captured
Tax
Capacity
for Tax
Abatement
City Net
Tax
Capacity
Rate
County Net
Tax
Capacity
Rate
School Net
Tax
Capacity
Rate
Combined
Tax Rate
Combined
Total forAll
Taxing
Jurisdictions
City Tax
Abatement
County Tax
Abatement
School Tax
Abatement
Total
Property
Taxes
Payable
1
2027
3,182,500
44,616
35.12%
33.78%
13.63%
82.54%
30,741
15,668
15,073
0
76,933
2
2028
6,428,650
109,539
35.12%
33.78%
13.63%
82.54%
75,474
38,468
37,007
0
156,076
3
2029
6,492,937
110,825
35.12%
33.78%
13.63%
82.54%
76,360
38,919
37,441
0
157,644
4
2030
6,557,866
112,123
35.12%
33.78%
13.63%
82.54%
77,255
39,375
37,880
0
159,227
5
2031
6,623,445
113,435
35.12%
33.78%
13.63%
82.54%
78,158
39,836
38,323
0
160,825
6
2032
6,689,679
114,760
35.12%
33.78%
13.63%
82.54%
79,071
40,301
38,770
0
162,440
7
2033
6,756,576
116,098
35.12%
33.78%
13.63%
82.54%
79,993
40,771
39,222
0
164,071
8
2034
6,824,142
117,449
35.12%
33.78%
13.63%
82.54%
80,924
41,245
39,679
0
165,719
9
2035
6,892,383
118,814
35.12%
33.78%
13.63%
82.54%
81,864
41,725
40,140
0
167,382
10
2036
6,961,307
120,192
35.12%
33.78%
13.63%
82.54%
82,814
42,209
40,606
0
169,063
742,655
378,515
364,140
0
3,326,212
TOTAL=
Key Assumptions:
1 Taxable market value (TMV) annual growth assumption =1.0%
2 Election for captured tax capacity is 100.00%
3 TMV includes 98 -room hotel, with amenities, and 6,200 SF restaurant to be immediately adjacent/attached to hotel. Wright County Assessor estimates
preliminary taxable market value for the project of $6,365,000 in today's (current) value.
Assumes project construction partially completed in 2025 for taxes first payable in 2027; and fully completed in 2026 for taxes payable in 2028.
Tax rates equal Proposed Pay 2024Tax Rates for the respective taxing jurisdictions. Wright County has not published Final Pay 2024Tax Rates.
Exhibit B
City of Monticello, MN
Monticello Hospitality Group, Hotel Development
Developer Sources and Uses of Funds for Construction
Total %of Total Average Per Hotel
Room ($)
Sources of Funds
First Mortgage 13,837,500 75.0% 141,199
Equity 4,612,500 25.0% 47,066
Total Sources of Funds 18,450,000 100.0% 188,265
Uses of Funds
Land / building acquisition costs (not incl. FFE)
1,000,000
5.42%
10,204
Equipment/ FFE
2,550,000
Hard construction costs
12,825,000
69.51%
130,867
Misc. and Contingency
500,000
2.71%
5,102
Working capital
200,000
1.08%
2,041
Other soft construction costs
35,000
0.19%
357
Financing costs
500,000
2.71%
5,102
Developmentfee
840,000
4.55%
8,571
Total Uses of Funds
18,450,000
86.18%
188,265
Numberof Hotel Rooms 98
Notes:
1. Use of funds includes cost of development both the hotel, including amenities and the restaurant.
Exhibit C
City of Monticello, MN
Monticello Hospitality Group, Hotel Development
Preliminary Estimated Pro Forma
Prepared by Northland Based on Information Submitted by Developer and Information Prepared by Northland
Calendar Year 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
Year of Tax Abatement District 1 2 3 4 5 6 7 8 9 10
Gross Income (before Tax Abatement)
2,494,098
3,143,508
3,542,156
3,813,992
3,941,219
4,206,383
4,457,467
4,720,024
4,994,515
5,281,422
Less Expenses
(1,366,439)
(1,798,791)
(1,994,957)
(2,142,681)
(2,213,434)
(2,347,999)
(2,486,391)
(2,631,055)
(2,782,242)
(2,940,217)
Net Operating Income (NOI)
1,127,659
1,344,716
1,547,199
1,671,311
1,727,784
1,858,383
1,971,076
2,088,969
2,212,272
2,341,205
Plus Tax Abatement Revenue (City and County)
30,741
75,474
76,360
77,255
78,158
79,071
79,993
80,924
81,864
82,814
NOI with Tax Abatement
1,158,400
1,420,191
1,623,559
1,748,566
1,805,943
1,937,455
2,051,068
2,169,893
2,294,137
2,424,019
Debt Service, Reserves, and Partnership
1,125,262
1,366,420
1,481,855
1,497,448
1,504,724
1,519,682
1,534,078
1,549,133
1,564,874
1,581,327
Management Fee
1.02
1.05
1.21
1.30
1.35
1.45
1.54
1.63
1.73
1.83
Net Cash Flow with Tax Abatement 33,138 53,770 141,704 251,118 301,218 417,772 516,990 620,760 729,263 842,692
Cash on cash with Tax Abatement (NO1 /TDC)
0.7%
1.2%
3.1%
5.49,o'
6.5%
9.1%
11.2%
13.5%
15.8%
18.3%
Cash on cash without Tax Abatement
0.1%
-0.5%
1.4%
3.8%
4.8%
7.3%
9.5%
11.7%
14.0%
16.5%
Cumulative YTD cash on cash with Tax Abatement
0.9%
1.7%
2.6%
3.4%
4.3%
5.3%
6.3%
7.4%
8.5%
Cumulative YTD cash on cash without Tax
-0.2%
0.3%
1.2%
1.9%
2.8%
3.8%
4.8%
5.8%
6.9%
Abatement
Debt coverage with Tax Abatement
1.05
1.11
1.27
1.36
1.41
1.51
1.60
1.69
1.79
1.89
Debt coverage without Tax Abatement
1.02
1.05
1.21
1.30
1.35
1.45
1.54
1.63
1.73
1.83
Notes:
1/ Total Development Cost (TDC):
18,450,000
2/Total Equity:
4,612,500
Consideration of Tax Abatement Pre-Application from Monticello Hospitality
Group, LLC.
Created by: City of Monticello
__1 ("t CITY OF
City Policy and
`' MonticeRito
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
City of Monticello Economic Development Authority
Tax Abatement and TIF Development Project Ranking
October 10, 2023
The scoring worksheet is to be used as a Guideline for weighing the
merits of the use of EDA development tools such as incentive
financing such as TIF or Tax Abatement. It is intended to be Guideline
and should be applied to prospects in this manner. There may be
instances where factors of a proposed development may warrant
deviation from the Guidelines. It is the EDA's discretion to adhere to
the Guidelines or deviate from them in the interest of furthering
Economic Development Goals and Objectives in the City of Monticello
as identified in by the Monticello Comprehensive Plan.
There are several factors that are pertinent to proposed scoring. They
are shown below with a Worksheet Summary at the conclusion.
1
Name of Project:
1. Number of New Employees
+1
1-5
+2
6-15
+3
16-30
+4
31-50
+5
51+
2. Number of Jobs Per Acre
Point Value Number Per Acre
+1
1— 2 per acre
+2
3 — 4 per acre
+3
5 — 6 per acre
+4
6 — 7 per acre
+5
8 + per acre
3. Average Wages for New Jobs
Point Value Pay Range
+1 $15,000-24,999
+2 $25,000-29,999
+3 $30,000-44,999
+4 $45,000-59,999
+5 $60,000+
Dollar Weighting
$20,000
$27,500
$37,500
$52,500
$60,000
4. Public Assistance oer New Jobs
$ Public Assistance
Number of new jobs created
2
Total Empl. Weighted $ Amt.
$ Public Assistance per new job
Point Value Public Dollars Invested Per New Job
+1
Over $50,000
+2
$40,000 to $49,999
+3
$30,000 to $39,999
+4
$20,000 to $29,999
+5
$0 to $19,999
5. Number of Years of TIF Assistance Needed
+0 9 years
+1 8 years
+2 7 years or less
6. Developed Assessed Value Per Acre
Point Value Value Per Acre
+1
$150,000-199,999
+2
$200,000-349,999
+3
$350,000-499,999
+4
$500,000-599,999
+5
$600,000+
7. Business Retention
Point Value Number of Retained Jobs
+0.5
1-5 jobs
+1
6-10 jobs
+1.5
11-30 jobs
+2
31-50 jobs
+2.5
50-100 jobs
+3
101 + jobs
3
8. Ratio of Private versus Public Investment in Project
$ Private Investment
$ EDA/Public Investment
n,.:_+ 11-1—
+1
+2
+3
+4
+5
Total Investment
Ratio of Private versus Public financing
Ratio
over 2:1
over 3:1
over 4:1
over 5:1
6:1 or greater
9. Significant Community Impact
Point Value Unsubsidized Spin -Off development potential
+1 Low potential for spin-off of unsubsidized development
+2 Moderate potential for spin-off unsubsidized development
+3 High potential for spin-off unsubsidized development
10. Tenure in Business Operation
Point Value Number of Years in Business
+1 Five years or less
+2 6 to 10 years
+3 11 years or more
4
11. Environmental Impacts
Point Value Tvaes of Environmental Issues
+1 Enhances the environmental aspects of a site via clean-up of contaminants or
improved aesthetics via unique site or architectural features
-0- No impacts
-1 Noise Issues
-2 Noise and negative visual aesthetics
-3 Noise, odors, dust, traffic and negative visual aesthetics
WORKSHEET SUMMARY
Factors
Total Points
#1.
Number of New Employees
(1-5)
#2.
Number of Jobs Per Acre
(1-5)
#3.
Average Wages for New Jobs
(1-5)
#4.
Public Assistance Per New Job
(1-5)
#5.
Number of Years of TIF Assistance
(1-2)
#6.
Developed Assessed Value Per Acre
(1-5)
#7.
Business Retention (# of Jobs)
(.5-3)
#8.
Ratio of Private to Public Invest.
(1-5)
#9.
Significant Impact/Comp Plan Goals
(1-3)
#10.
Number of Years of Business Oper.
(1-3)
#11.
Environmental Impacts
(-3 to +1)
Total Points
Total Possible Points = 42
5
_s
5t
Hotel Market Study - Monticello, MN Recommended Facilities
SECTION 6: RECOMMENDED FACILITIES
This section of the report presents the facilities that are recommended for a hotel
that will be most successful given the area market characteristics. Estimates of
the utilization of the recommended hotel are presented in the next section of the
report.
HOTEL FACILIITY RECOMMENDATIONS
Building both quality and amenities into a hotel adds cost and therefore, higher
quality hotels with a restaurant and meeting space must charge higher room
rates. Thus, the price sensitivity of a market must be assessed in order to
determine the type of a hotel project that can be supported by the subject market.
The full-service hotel has all but disappeared in recent years for locations other
than urban areas, large office parks, and corporate centers. This is due to their
higher cost (and higher room rates) relative to limited -service hotels that can
offer the same quality room but at a lower rate. Due to the challenges of staffing
and operating a restaurant, full-service hotels are also considered to be of greater
risk by lenders and investors.
Based on our evaluation of the local hotel supply and demand conditions we
believe that an 80 -room limited -service hotel of upper midscale quality will
perform best within the Monticello competitive market.
Guest Rooms
The guest rooms should be finished with high quality floor and wall coverings and
appropriately furnished. Bathrooms should be tiled and have granite counter-
tops. Most of the bathrooms should have a walk-in shower, rather than a tub.
Rooms should include smart televisions with at least one popular streaming
service, a coffee maker, and free high-speed internet. We suggest the hotel's room
complement should include some interconnecting rooms to better accommodate
51 Hospitality Consulting Group
Hotel Market Study — Monticello, MN Recommended Facilities
family travelers. Four 1 -bedroom suites are recommended to accommodate
relocations, wedding parties and guests celebrating special occasions. At least one
of the suites should offer full kitchen facilities suitable for long term stays.
Meeting Facilities
The hotel should include a public function room of approximately 1,000 square
feet. A room of this size could accommodate 50 to 80 for a meeting, 50 for a
banquet, and 100 for a reception. This amenity will allow the hotel to attract an
additional demand segment made up of area meetings and social functions.
Other Amenities
Other amenities that are recommended for the hotel include:
• An indoor pool that will improve the hotel's competitiveness for leisure
travelers and for visitors to area residents;
• An exercise room with several high-quality exercise machines and a
television;
• A business center with a computer and printer available to guests 24
hours a day;
• Complimentary breakfast for guests; and
• High speed wireless internet access throughout the hotel.
Parking
Adequate and convenient parking will be required for the success of the hotel. In
order to meet local code requirements, we estimate that the hotel should have at
least 100 parking spaces. Additional parking may be required to accommodate
attendees at functions that are not staying at the hotel.
Franchise Discussion
There is an emerging trend within the hotel industry whereby guests select a
hotel based on its company's rewards program, rather than on convenience of
location, room rates or amenities. The large franchise companies award points
52 Hospitality Consulting Group
Hotel Market Study - Monticello, MN Recommended Facilities
for staying in their hotels which can then be redeemed for free or discounted stays
at any hotel within their respective chains. Thus, it is not unusual for travelers to
drive an extra distance to stay at a hotel whose rewards program they participate
in. This factor can distort the competitive environment within a particular hotel
market.
Marriott, Hilton, and Intercontinental Hotel Group have the most popular
programs, as they have hotels throughout the world, including a number of
popular resorts, where rewards can be redeemed. Choice Hotels has a liberal
rewards program that provides free hotel rooms, but its inventory of hotels and
resorts is not nearly as extensive as the three aforementioned hotel companies.
Because these hotel brands are represented in nearby Albertville, Rogers and
Maple Grove, we recommend that a hotel carrying a well-recognized national
franchise should be considered for Monticello in order to achieve maximum
market penetration. The stronger the subject hotel's franchise, the less business
will be lost to these hotels in the surrounding markets.
53 Hospitality Consulting Group
Hotel Market Study — Monticello, MN Financial Projections
Financing Scenario
The terms for hotel financing depend on the experience and financial strength of
the developer and the operator. At the present time, conventional hotel loans are
being made at 8.0 to 8.5 percent interest rate with the requirement of between 30
to 40 percent equity. For analysis purposes we have assumed an 8.0 percent in-
terest rate and a 35 percent equity investment or $3,850,000, leaving a loan of
$7,150,000 to provide funds for the $11,000,000 total project cost.
Source of Funds:
Equity
Debt
$3,850,000 35%
7,150,000 65%
$11,000,000 100%
Debt Term Assumptions:
Annual Interest Rate:
8.0%
Amortization:
20 years
Annual Payment:
$718,000
The results of this analysis are presented in the following table.
Economic Feasibility Analysis
Estimated Project Cost: $11,000,000
35% Equity, 65% Debt; 8% Interest
Cash Flow Avail. for Debt Service
Debt Service
;Debt Service Coverage Ratio
Cash Flow to Equity
Equity
Return on Equity
2025 2026 2027 2028 2029
$846,000 $853,000 $939,000 $989,000 $1,067,000
$718,000 $718,000 $718,000 $718,000 $718,000
1.18 1.19 1.31 1.38 1.49
$128,000 $135,000 $221,000 $271,000 $349,000
$3,850,000 $3,850,000 $3,850,000 $3,850,000 $3,850,000
3.3% 3.5% 5.7% 7.0% 9.1%
A debt coverage ratio (cash flow/annual debt service) of a minimum of 1.2 times
is required and 1.4 times is typically preferred by lenders. This analysis shows
that the hotel is projected to generate sufficient cash flow to minimally meet its
71 Hospitality Consulting Group
Hotel Market Study - Monticello, MN Financial Proiections
debt service requirements in the first two years, and will not produce a comfort-
able debt coverage until its fourth year.
Hotel investors typically like to see cash on cash returns of at least 10 percent. A
hotel development company, who also would manage the hotel, may include the
management fee in its investment decision and thus accept a lower return. In this
simple analysis, the projected cash on cash return on equity only reaches 9 per-
cent by the hotel's fifth year of operation.
The project cost and terms of financing assumptions used in this analysis
produces marginal debt coverage in the hotel's early years and does not pro-
vide an acceptable return on investment until its fifth year. Therefore. we
conclude that the hotel nroiect may not he Pr nnmically feasible 1 without
some measures that either reduces its cost or the interest rate, or both.
72 Hospitality Consulting Group
Jim Thares
From: Sarah T. Kortmansky <skortmansky@northstarbank.com>
Sent: Thursday, January 11, 2024 1:32 PM
To: Ted Christianson; Rob Thompson
Subject: Follow-up
Rob and Ted -
Below is a summary of what we'd be looking to bring to our committee/ board for approval.
Nex Steps would be receipt of construction and FF&E Budgets, guarantor financial review, including Cl and GNP. If
you'd like a secure upload link, let me know.
Thanks!
- LTV not to exceed 75% of appraised value
- Operating Account @ NSB
- R&M - 5% Revenue after stabilization @ NSB
- mos 1-12 I -only construction
- mos 13-24 I -only stabilization
- mos 25-36 I -only plus Principal of 25% of excess cash flow after Interest carry and reserve
requirements, not to exceed what would be required under regular amortization
- thereafter full P&I, Dividends not to exceed Cash Flow From Operations minus DS and Maintenance
Reserve
- Assume NW of guarantors in excess of $100m
- Require 2X loan amount in verified guarantor liquidity (NOT PLEDGED)
- Unlimited Guaranty of Cl and GNP until Stabilization
- All other guarantees to be negotiated.
- Current Interest Rate in the 7%'s, but TBD upon receipt of full package
Work hard, do the right thing.
Sarah Kortmansky
Market President
LPO/DPO at 530 Walnut Street, Monticello, MN 55362
North Star Bank - "Your Financial Partner"
direct. 763.235.1135 cell: 952.358.0235 fax: 651.489.9541
Confidentiality Notice: This e-mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and
privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and
destroy all copies of the original message. Thank you.
From: Ted Christianson <ted.christianson@gnproperties.net>
Sent: Thursday, January 11, 2024 12:47 PM
To: Sarah T. Kortmansky <skortmansky@northstarbank.com>; Rob Thompson <rob.thompson@Ciconstruction.com>
Subject: RE: Marriot Hotel proforma - Monticello
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ciconstruction.com 320.763.2889
THIS SET OF PLANS IS THE PROPERTY
OF
C.I. CONSTRUCTION, LLC. IT HAS BEEN
ISSUED AS A CONFIDENTIAL
DISCLOSURE. COPY OR DUPLICATION
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ciconstruction.com 320.763.2889
THIS SET OF PLANS IS THE PROPERTY
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C.I. CONSTRUCTION, LLC. IT HAS BEEN
ISSUED AS A CONFIDENTIAL
DISCLOSURE. COPY OR DUPLICATION
OF ANY PART OF THIS DISCLOSURE IS
STRICTLY PROHIBITED WITHOUT PRIOR
WRITTEN CONSENT OF C.I.
CONSTRUCTION, LLC.
t *n k
118 E. 26th Street
Suite 300
Minneapolis, MN 55404
P:612-879-8225
F:612-879-8152
www.tanek.com
REVISIONS
NO. DESCRIPTION DATE
Monticello Hotel
prelim. floor plans
Date March 4, 2024
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Construction, LLC
C.I. Construction, LLC
1210 Broadway l Suite 400
Alexandria, MN 56308
320.763.2998 phone / 320.763.7112 fax
www.ciconstruction.com
THIS SET OF PLANS IS THE PROPERTY OF
C.I. CONSTRUCTION, LLC. IT HAS BEEN
ISSUEDAS A CONFIDENTIAL DISCLOSURE.
COPY OR DUPLICATION OF ANY PART OF
THIS DISCLOSURE IS STRICTLY
PROHIBITED WITHOUT PRIOR WRITTEN
CONSENT OF C.I. CONSTRUCTION, LLC.
English and
Smart Architects,
L L c
851 Eagle Ridge Lane
Stillwater, MN 55082
Phone 651-275-0267
www.englishandsmart.com
I hereby certify that this plan,
specification, or report was prepared
by me or under my direct supervision
and that I am a duly registered
Architect under the laws of the state
of Minnesota.
Signed: M. EH ks�
5/18/2016
Reg, No. 21384
REVISIONS
NO. DESCRIPTION DATE
1 ADJUSTED COLUMN LOCATION 7/21/16
2 RELOCATED TRASH ENCLOSER & DOOR 1119/15/16
2 ADDED DOOR 137 9/15/16
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THIS SET OF PLANS IS THE PROPERTY
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ISSUED AS A CONFIDENTIAL
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OF ANY PART OF THIS DISCLOSURE IS
STRICTLY PROHIBITED WITHOUT PRIOR
WRITTEN CONSENT OF C.I.
CONSTRUCTION, LLC.
t n k
0
118 E. 26th Street
Suite 300
Minneapolis, MN 55404
P:612-879-8225
F:612-879-8152
www.tanek.com
REVISIONS
NO. DESCRIPTION DATE
Monticello Hotel
exterior renderings
Date March 4, 2024
Drawn by TVH / ER
x201
Scale as noted
0
C.I. CONSTRUCTION
DEVELOP
I DESIGN
I MANAGE
1910 42nd Avenue W, Suite 300 Alexandria, Minnesota 56308
ciconstruction.com 320.763.2889
THIS SET OF PLANS IS THE PROPERTY
OF
C.I. CONSTRUCTION, LLC. IT HAS BEEN
ISSUED AS A CONFIDENTIAL
DISCLOSURE. COPY OR DUPLICATION
OF ANY PART OF THIS DISCLOSURE IS
STRICTLY PROHIBITED WITHOUT PRIOR
WRITTEN CONSENT OF C.I.
CONSTRUCTION, LLC.
t n k
0
118 E. 26th Street
Suite 300
Minneapolis, MN 55404
P:612-879-8225
F:612-879-8152
www.tanek.com
REVISIONS
NO. DESCRIPTION DATE
Monticello Hotel
exterior renderings
Date March 4, 2024
Drawn by TVH / ER
x201
Scale as noted
0
ECONOMIC DEVELOPMENT GOALS
Listed below are the economic development goals which were informed by the Community Vision. For the complete set of policies and strategies for the goals refer
to the Implementation Chapter.
GOAL 1: BUSINESS ATTRACTION AND RETENTION
A successful business attraction and retention program that attracts new businesses and retains existing businesses.
GOAL 2: TAX BASE EXPANSION
A stable and expanding tax base that diversities the city's economy and creates a sustainable employment to offset the eventual closure
of the Xcel Monticello Nuclear Generating Plant.
GOAL 3: DOWNTOWN VITALITY
A vibrant and thriving Downtown that contributes to the City's economic development and housing objectives.
GOAL 4: REDEVELOPMENT AND REINVESTMENT
Redevelopment of vacant and underutilized parcels consistent with meeting the City's economic development, land use and community design objectives.
GOAL 5: LIFECYCLE HOUSING
Monticello will be a community with a wide variety of housing options that includes workforce, starter, step up, and senior housing to allow for new and existing residents
to remain and age in the community.
GOAL 6: WORKFORCE DEVELOPMENT
A workforce developme►fif Ktroining program that provides the skills and knowledge needed for a wide range of jobs and opportunities.
GOAL 7: PROMOTION AND PARTNERSHIPS
Collaborative Partnerships and the Promotion of Monticello Economic Development Projects, Programs and Activities.
GOAL 8: OPPORTUNITY FOCUS AREAS
Reinvestment, redevelopment and overall improvement of the opportunity focus areas within the City.
MONTICELLO 2040 VISION + PLAN 131
GoodNeighbor Properties, LLC
Rob Thompson Ted Christianson
Managing Member Managing Member
1910 42nd Ave C 612.812.1563 C 1 701.361.3734
Alexandria, MN 56308 E rob.thompsonaagnproperties.net E ted.christiansonCagnproperties. net
www.gnproperties.net
CONTENTS
ABOUT US 3
DEVELOPMENT TEAM 4
TITAN MACHINERY DEALERSHIPS 5
SUNOPTA WAREHOUSE 6
2010 BUILDING
1g10 BUILDING
FAIRFIELD INN AND SUITES
TITAN MACHINERY SRC
MAPLEWOOD MANOR
LONGTREES WOODFIRE GRILL
BOULDER TAPHOUSE
THE COTTAGE
CURRENT DEVELOPMENTS
S
�9
10
11 GNP
12
13
14
15
C.I. CONSTRUCTION
Since the 1940s, C.I. Construction, LLC has gained a hard-earned reputation specializing 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 for you.
Since the 1940s, 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 become 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 flexibility 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. While many Construction Managers go the easy route and select one
General Contractor our team breaks each project down into smaller 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 our 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
FOUNDING PARTNER / MANAGING MEMBER
•35+years of Real Estate Development Experience
-President/Owner of C.I. Construction
-Business Degree from St. John's University
\� TED CHRISTIANSON
FOUNDING PARTNER / MANAGING MEMBER
•30+ years of Real Estate Development Experience
-President/Managing Partner of Adam Smith Properties
-Masters Degree from North Dakota State University
TITAN MACHINERY DEALERSHIPS
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DEVELOPMENT HIGHLIGHTS
Project Location: Multiple Locations in MN, ND, 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, assi
designed project, built by C.I. Construction.
Property Owner: Dealer Sites
Contact: John Kretchman 701-371-6487
Tenant: Titan Machinery
Contact: Peter Christianson 701-238-4418
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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 fina
Cl Construction. Coordinated pipeline easement with NuS
challenges with lakeshore setbacks and wetland mitigatio
Obtained TIF Financing,
FINANCING ENTITY: Bremer Bank
TENANTS: SunOpta
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PROJECT HIGHLIGHTS
PROJECT LOCATION- Alexandria, MN
TOTAL SF; 48,278
DEVELOPMENT HIGHLIGHTS
Land acquisition, obtained financing, designed project, built by Cl Construction. Coordinated
pipeline easement with NuStar Energy. Maximized k
MR -24 seamed roof and 4" insulated metal panels.
construction per tenants request
FINANCING ENTITY: 1st Western Bank
TENANTS: ECM, Servepro
igio BUILDING DEVELOPMENT
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DEVELOPMENT HIGHLIGHTS
Project Location: Alexandria, MN Total SF; 47,511
Property Owner: GoodNeighbors - Zg10 Building, LLC
Facility overview: Initial buildout 26,931SF, 20,58oSF addition. Warehouse, loading docks,
and offices,
Development roles: Acquired land, obtained financing, designed project, built by
C.I. Construction.
Financing Contact: Corey Simonson - 1st Western Bank
VP Commercial Lending (320) 335-6006
Tenants: Douglas Machinery, ServePro, Cl Construction
Tenant Contact: Jim Winkels
Douglas Machine Inc - (320) 815-0748 A WAA/$/
nt
FAIRFIELD INN AND SUITES
DEVELOPMENT HIGHLIGHTS
Project Location: Alexandria, MN Total SF: 44,835
Facility overviews: 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 AV
Contact: Fred Kindle (231) 881-1140 X/7/ P
TITAN MACHINERY - SHARED RESOURCE CENTER
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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
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DEVELOPMENT HIGHLIGHTS
Project Location: Elbow Lake, MN Total SF: 43.139
Facility overview: Remodel and addition to old hospital and connected apart-
ments. Converted to assisted living facility.
Development roles: Acquired land, designed project, negotiated TIF and grant
money, built by C.I. Construction.
Financing Contact: Craig Olson - Bremer Ban[
Property Owner: GoodNeighbors - Maplewoo
Operation Management Company -
Northern Oaks Senior Living
Contact: Amy Deacon - (701) 793-788o
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LONGTREE'S WOODFIRE GRILL
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DEVELOPMENT HIGHLIGHTS
Project Location: Alexandria, MN
Total SF: 5.1go
Development roles: Acquired land, obtained financing, designed project, built by
Cl Construction.
Financing Entity: Bremer Bank
Financing Contact: Craig Olson - VP Commer(
Property Owner: GoodNeighbors South, LLC
Tenant: Longtree's Woodfire Grill
Contact: Mike Rakun (612) 799-0418
GOODNEIGHBORS 2 DEVELOPMENT
DEVELOPMENT HIGHLIGHTS
Project Location: Alexandria, MN
Total SF: 7,432
Development roles: Acquired land, obtained financing, designed project, built k
CI, Construction.
Financing Entity: 1st Western Bank
Financing Contact: Corey Simonson - VP Corr
(320) 335-6006
Tenants: Boulder Tap House, Cricket Wireless
Tenant Contact: Jess Clark
Boulder Taphouse 320-232-5205
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DEVELOPMENT HIGHLIGHTS
Land acquisition, obtained financing, secured TIF and
grant funding, designed project, construction to be
managed by Cl Construction.
27,000SF of Commercial space including
restaurant, retail, and professional services.
Rooftop patio over restaurant
Two levels of underground parking
DEVELOPMENT HIGHLIGHTS
Land acquisition, obtained financing, secured TIF,
designed project, construction to be managed by Cl
Construction.
18,000SF of Commercial space including coffee,
retail, event space, and professional services.
Rooftop patio over restaurant
Underground parking
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DEVELOPMENT HIGHLIGHTS
Land acquisition, obtained financing, secured TIF and
grant funding, designed project, construction to be
managed by Cl Construction.
27,000SF of Commercial space including
restaurant, retail, and professional services.
Rooftop patio over restaurant
Two levels of underground parking
DEVELOPMENT HIGHLIGHTS
Land acquisition, obtained financing, secured TIF,
designed project, construction to be managed by Cl
Construction.
18,000SF of Commercial space including coffee,
retail, event space, and professional services.
Rooftop patio over restaurant
Underground parking
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DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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").
1. 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 1 of Deephaven 3,
according to the recorded plat thereof, Wright County,
Minnesota. (See Attached Exhibit A)
Tax Parcel #: 155265000010
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.
2.1 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 +/-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 Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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 fiu-nish Company a title insurance
commitment to the Property showing good and marketable title in Contributor,
including legal access, ingress and egress to the Property, free 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 Taxes and Assessments. 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 known, 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.
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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 bankruptcies, 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.
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.
It. A non -foreign affidavit containing such information as is required under
Section 1445(b)(2) of the Internal Revenue Code and any regulations
relating thereto.
i. 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 of Closing Expenses. The parties shall apportion the closing expenses
in the following manner:
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.
vi. One-half the cost of the closing fee charged by the title company.
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
b. Company's expenses - Company shall be responsible for:
i. 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 make 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 document 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 malting 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,
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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 there 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 fitrnish your Social Security number
or taxpayer identification number in this Agreement,: (ii) the Internal Revenue
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
Service notifies the Company that you furnished an. incorrect Social Security
number or taxpayer• identification. number, (iii) you are notified that you are subject
to backup withholding, or (iv) you fail to certify that you are not subject to backup
withholding or you fail to certify your Social Security number 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 organized/incorporated, 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 time 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:
o Include any debt that you incurred within the last 60 days
that is secured by your primary residence (unless 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 ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
(c) A governor or an executive officer/manager of the Company.
(d) A bank, 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.
(i) 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 itein 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 items (a) -O), above. Also check the item(s) (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) -O), above. Also check the item(s) (a) -O) that
applies.
(m) Contributor is NOT an accredited investor.
3.16 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 ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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 300, 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 fiom, 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 malting 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 radio 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 from 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 damage, 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
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
"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 making a contribution for,
the Units for the account of Contributor 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
making 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; Lock-up Restriction.
5.1 Transfer Restrictions. Contributor agrees that if the Units or any part of the Units
are sold or distributed in the future, Contributor may sell or distribute them 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 comlection
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: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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 from registration under the Act, and under the
applicable state securities laws."
"The Units 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 permits 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 Company'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 ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
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.
[Signature page follows]
DocuSign Envelope ID: FDJDA901-6B5F-4C3E-A7C0-EB007B1F6A59
Signature Page to Monticello Hospitality Group, LLC Contribution Agreement and Letter
of Investment Intent
12/6/2023
Dated: , 20
Lk
*jdpatContributor(s):
4& f �ul,�t.�.b(iy
"''
Contributor (Signature)
Contributor (Signature, if more than one investor)
Marls Buchholz
Print Name
Print Name (If more than one investor)
4379 33rd Ave S Suite 121 Fargo ND 58104
Address
Entity Contributors:
Deephaven Development LLC
Name of Entity Typ -%Alwo
By:Mark Buchholz hA b b(/j
A
Its: Managing Partner
3010 Sheyenne River Way West Fargo, ND 58078
Address
The Compan hereby accepts the contribution evidenced by this Agreement to be effective as of
1276/2023 , 20
MONTICELLO HOSPITALITY GROUP, LLC
BY G NEIGHB ROP RTIES, LLC,
ITS A ER:
Y
Te Christianso , Manager
By:
Ro ert Thompson, Manager
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
CONTRIBUTOR INFORMATION
Deephaven Development, LLC
(Please print exact legal name(s) in which the Units are to be issued)
1YA1•.4i1ral
Taxpayer I.D. No.
437933 rd Ave S Suite 121
Address
City: Fargo
Taxpayer I.D. No.
(If more than one investor)
State:ND
Telephone Number: (_701_) 371-1646
Fax Number: O
Email Address: mark@buchprop.com
Check One:
Zip Code: 58104
Individual Ownership _X_LLC*
_Joint Tenants (JTWROS) Corporation*
Tenants in Common Revocable Trust*
Partnership* Irrevocable Trust*
.Qualified Retirement Account*# Other*
*If checked, complete the attached Certificate of Signatory.
#For 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: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
CERTIFICATE OF SIGNATORY
(To be completed if Units are being subscribed for by an Entity)
I, Mark Buchholz am the Operating Partner
of Deephaven 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 of the Entity and constitutes a legal and
binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this _6_ day of
December 2023.
EDocu�S-ignedvby�:�
744BA34D27-0G9...
(Signature)
Operating Partner
(Title)
Mark Buchholz
(Please Print Name)
DocuSign Envelope ID: FD1DA901-6B5F-4C3E-A7C0-EB007B1F6A59
Execution Com
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 terms 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.
Date: 12/06/23
Member Name: _Mark Buchholz
oocusi9nea by: (Print)
By: ,��
(Signature)
Its: (if an entity) Deephaven Development, LLC
16
EDA Agenda: 4/10/24
513. Consideration of Greater Monticello Enterprise Fund (GMEF) Loan Pre -Application
from Excelsior Tool in the amount of $250.000
Prepared by:
Meeting Date:
9 Regular Agenda Item
Economic Development Manager
4/10/24
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Finance Director, Community &
Economic Development Coordinator
ACTION REQUESTED
Motion to authorize staff to proceed with further due diligence related to the GMEF loan credit
application request from Excelsior Tool and preparation of a loan agreement for consideration
at a future meeting.
Motion of other.
REFERENCE AND BACKGROUND
The EDA is asked to consider a GMEF Loan Pre -Application request in the amount of $250,000
from Excelsior Tool. The company is seeking gap funding assistance to purchase an existing
industrial building in Monticello and relocate its operations from Maple Plain, MN.
Excelsior Tool is a plastic injection mold -tool manufacturing company. It currently has 9 FTE
employees (the owner is not counted as an employee) with a business plan showing continued
growth and adding 2 to 3 additional FTEs over the next three years. Bob Busch, the owner of
Excelsior Tool, purchased the company over 25 years ago and has been able to secure a key
niche engaged in the business of machining and fabricating the molds -tools used by firms
engaged in the plastic injection molding industry.
The proposed project includes the purchase of a 12,000 sq. ft. building located at 208 Dundas
Road, Monticello. The building has previously housed small manufacturing firms. Most recently,
the site was the location of ServPro of Wright County, a restoration, maintenance, construction
services and cleaning company. The Excelsior Tool project components consist of property
acquisition, facility improvements, equipment installation, and off-site development costs
related to equipment moving.
Financial information in the GMEF Pre -Application shows the proposed financing structure.
Excelsior has identified First Minnetonka City Bank, Minnetonka, MN, as the primary lender
(first mortgage loan) with approximately 60.87 percent of the funding. The Bank's pre -approval
letter is an exhibit of the Pre -Application packet. The Company ownership is proposing to inject
EDA Agenda: 4/10/24
$200,000 of cash equity or 17.39 percent toward the proposal financing and is seeking to fill a
gap of $250,000, or 21.74 percent of the total cost, though the GMEF Loan Program. A
summary of the sources and uses is shown below.
Funding Sources
E n t i t v Amount Percent
Bank
$700,000
60.87
Owner Cash Equity
$200,000
17.39
GMEF Loan
$250,000
21.74
Total
$1,150,000
100.00
Funding Uses
Item
Amount
Percent
Property Purchase
$900,000
78.26
Property Improvements
$150,000
13.04
Equipment Relocation
$100,000
8.70
Total
$1,150,000
100.00
The proposed project is an eligible use of the funds. The available GMEF Loan Program cash
balance is approximately $763,000 +/-. The loan request equates to about 32.8 percent of the
Fund balance. Per the GMEF Loan Polices, no more than 50 percent of the Fund's available
dollars can be loaned out to a single borrower. Only 30 percent of a project can be funded
through GMEF dollars. Currently, there is no stated minimum Fund balance requirement in the
GMEF Loan Policies.
I. Budget Impact: The budget impact from the proposed GMEF Loan request is a direct
reduction in the cash balance of the loan fund. If approved, the funding would draw the
Fund's cash balance down to $513,000 +/-. Other potential borrowers may be constrained
somewhat in the future due to the size of this request if it is ultimately approved by the
EDA. The EDA has incurred no costs in the review of the pre -application. If the EDA
determines it is interested in moving forward, attorney fees and loan review -underwriting
fees will be incurred, though most, if not all, of those costs will be passed onto the
applicant.
II. Staff Workload Impact: The Community Development Director, Finance Director and
Economic Development Manager have committed time to completing tasks related to the
review of the proposed loan request. Additional time toward this effort involves report
preparation and EDA meeting presentation. No other staff are required to complete the
work in this effort.
EDA Agenda: 4/10/24
III. Comprehensive Plan Impact: The Economic Development section of the Comprehensive
Plan encourages formation of an effective economic development effort which creates a
supportive business environment and builds a vibrant, thriving local economy.
STAFF RECOMMENDATION
Staff defer to the EDA regarding next steps related to the GMEF Loan request from Excelsior
Tool. The loan request meets the general intent and spirit of the GMEF Loan Policies.
An initial review of the Development Assistance Worksheet Scoring form for the proposal
using a limited amount of available information indicates the proposal carries a score of 29.
This initial review is a critical decision point in regard to moving to the next step of a full
application as well as incurring costs related to underwriting -loan analysis and drafting of loan
documents.
SUPPORTING DATA
A. Excelsior Tool GMEF Loan Pre -Application
B. Aerial Photo and Beacon Rpt. - 208 Dundas Road
C. GMEF Loan Policies
CITY ' tOF
CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY
BUSINESS SUBSIDY APPLICATION
Monticeffo BUSINESS ASSISTANCE FINANCING
763-295-2711 — info@ci.monticello.mn.us
Name of Contact Person: Robert Bush
2895 11011 ST NE Monticello MN 55362
Address:
612-875-4499
Telephone number:
Excelsior Tool
Business Name:
Business Address: 1474 county road 90 Maple Plain MN 55359
REQUESTED INFORMATION
Addendum shall be attached hereto addressing in detail the following:
1. A map showing the exact boundaries of proposed development.
2. Give a general description of the project including size and location of building(s); business
type or use; traffic information including parking, projected vehicle counts and traffic flow;
timing of the project; estimated market value following completion.
3. The existing Comprehensive Guide Plan Land Use designation and zoning of the property.
Include a statement as to how the proposed development will conform to the land use
designation and how the property will be zoned.
4. A statement identifying how the increment assistance will be used and why it is necessary to
undertake the project.
5. A statement identifying the public benefits of the proposal including estimated increase in
property valuation, new jobs to be created, hourly wages and other community assets.
6. A written description of the developer's business, principals, history and past projects
I understand that the application fee will be used for EDA staff and consultant costs and may be partially
refundable if the request for assistance is withdrawn. Refunds will be made at the discretion of the EDA
Board and be based on the costs incurred by the EDA prior to withdraw of the request for assistance. If
the initial application fee is insufficient, I will be responsible for additional deposits. I further understand
that by signing below, should the original escrow be exceeded, the applicant or responsible party will be
billed for all additional services. In signing the acknowledgement below, the applicant is indicating that
they have not relied on the estimate of fees in their decision to proceed with the application. If payment is
not received as required by this agreement, the City will proceed to recover payment by action of
assessment or a lien against the real property. Payment of the costs will be required whether the
application is granted or denied.
SIGNATURE
Applicant's signature.
Date: 3 -- -2o az
2
FINANCIAL BACKGROUND:
no
1. Have you ever filed for bankruptcy?
no
2. Have you ever defaulted on any loan commitment?
3. Have you applied for conventional financing for the project? yes
4. List financial references:
Scott Elleraas (952- 465-0301) First Minnetoka Bank
a.
b. Robert Murphey (763-493-5799) CPA
5. Have you ever used Business Assistance Financing before?
If yes, what, where and when?
PROJECT INFORMATION:
208 Dundas RD Monticello MN 55362
1. Location of Proposed Project:
2. Amount of Business Assistance requested? $250,000
3. Need for Business Assistance: Buy building and move shop
4. Present ownership of site:
Hickman Enterprises LLC
5. Number of permanent jobs created as a result of project?
6. Estimated annual sales: Present: $1,900,000
7. Market value of project following completion: $950,000
7-1-2024
8. Anticipated start date:
3
10
no
Future: $2,250,000
10-1-2024
Completion Date:
FINANCIAL INFORMATION:
1. Estimated project related costs:
a. Land acquisition
b. Site development
c. Building cost
d. Equipment
e. Architectural/engineering fee
f. Legal fees
g. Off-site development costs
2. Source of financing:
a. Private financing institution
b. Tax increment funds
c. Other public funds
d. Developer equity
$150,000
$900,000
$100,000
$ 700,000
$250,000
$200,000
4
PLEASE INCLUDE:
I. Preliminary financial commitment from bank.
2. Plans and drawing of project.
3. Background material of company.
4. Pro Forma analysis.
5. Financial statements.
6. Statement of property ownership or control.
7. Payment of application fee of $250.
c<, EXCELSIORTOOL
I Building Excellence
1474 County Road 90 ♦ Maple Plain, MN 55359 763-479-3355 ♦ FAX 763-479-3581
We are plastic injection mold builder and have been in business since 1978. Our facility
is currently located at 1474 County Road 90 Maple Plain MN, 55359. We would like to
relocate to Monticello and are currently looking at 208 Dundas RD to be the future home
Excelsior Tool. We have 9 full time employees with pay ranging from $25.00-$40.00 an
hour with full benefits. This building and location would allow us to expand our business
in the future. The increment assistance will help us renovate the building to our needs.
We feel our business could bring long term good paying jobs into the community.
GLEN LAKE
145SO Excelsior Blvd.
Minnetonka. MN 55345
9S2.935.8663
fax 952.935.4957
CGLINTRY VILLAGE.
11500 Highway 7
Minnetonka, MN 55305
9S2.93S.S995
(ax 952.935.1611
wwvvJ acbank.corn
Mcniber FDIC
March 27, 2024
Robert Bush
Scott Thomsen
Excelsior Tool Co., Inc.
1474 County Road 90
Maple Plain, MN 55359
Dear Robert and Scott:
FIRST MINNETONKA
CITY BANK
I am pleased to inform you that our Loan Committee has pre -approved the
commercial real estate loan requested to purchase the property located at 208
Dundas Road, Monticello, MN 55362. 1 have listed below the terms, covenants,
and conditions under which First Minnetonka City Bank is willing to
accommodate your loan request:
TERM LOAN
Amount: Up to $720,000.00
Borrower: Robert Bush and Scott Thomsen or corporate entity to be
formed.
Purpose: Purchase existing commercial property.
Rate: Interest rate to adjust every 5 years based on the 5 -year
Treasury index, adjusted to a constant maturity plus
3.00%.
Fees:
1.00% origination fee.
Term/Amortization: 20 -year term with a 20 -year amortization period.
Prepayment Penalty: None
Guarantees: Personal guaranties of Robert Bush and Scott Thomsen.
Corporate guaranty of Excelsior Tool Co., Inc.
Collateral: 1st REM on the property located at 208 Dundas Road,
Monticello, MN 55362.
Other Terms and Conditions:
1. Receipt of a fully executed purchase agreement with the price of the subject
property not to exceed $900,000.00.
2. Bank's receipt of an acceptable appraisal, title insurance commitment and
environmental report on the subject.
3. Borrower to provide an acceptable certificate of insurance covering the subject
property naming the Banks as lender loss payee.
4. Borrower shall provide federal partnership tax returns to the Bank each year
within 30 days of filing.
5, Personal guarantors shall provide personal financial statements and the
corresponding year's personal tax return on an annual basis.
6. Corporate guarantors to provide corporate federal tax returns to the Bank
each year within 30 days of filing.
7. Borrower agrees to reimburse the Bank for all out-of-pocket expenses involved
in the processing, document preparation and closing of this loan.
8. Any other terms and conditions required by the Bank's Credit Committee.
Please feel free to call me at 952-465-0301 if you should have any questions or concerns
regarding the terms and conditions I have outlined in this letter. I look forward to
hearing your thoughts at your earliest convenience.
Sincerely,
Scott A. Elleraas
Vice President/Senior Lending Officer
ON,Beacon11 Wright County, MN
Overview
i
Legend
Roads
— CSAHCL
— CTYCL
— MUNICL
— PRIVATECL
— TWPCL
Highways
Interstate
State Hwy
US Hwy
City/Township Limits
®c
❑t
Parcels
Parcel ID 155188001020 Alternate ID n/a Owner Address HICKMAN ENTERPRISES LLC
Sec/Twp/Rng 14-121-025 Class 234 - 3A INDUSTRIAL LAND AND BUILDING 208 DUNDAS RD
Property Address 208 DUNDAS RD Acreage 1.28 Acres MONTICELLO, MN 55362
MONTICELLO
District (1101) CITY OF MONTICELLO-0882
Brief Tax Description SECT -14 TWP-121 RANGE -025 BLUE CHIP DEVELOPMENT LOT -002 BLOCK -001
(Note: Not to be used on legal documents)
Date created: 4/3/2024
Last Data Uploaded: 4/3/202411:08:39 AM
Developed by" Schneider
GEOSPATIAL
4/4/24, 4:09 PM
Wright County, MN
Summary
Beacon - Wright County, MN - Report: 155188001020
Parcel ID
155188001020
Property Address
208 DUNDAS RD
Architecture
MONTICELLO MN 55362
Sec/Twp/Rng
14-121-025
Brief Tax
SECT -14 TWP-121 RANGE -025 BLUE CHIP DEVELOPMENT
Description
LOT -002 BLOCK -001
4.500
(Note: Not to be used on legal documents)
Class
234- 3A INDUSTRIAL LAND AND BUILDING
District
(1101) CITY OF MONTICELLO-0882
School District
0882
Total
(Note: Class refers to Assessor's Classification Used For
Roof Structure
Property Tax Purposes)
GIS Acres
Parcel: 155188001020
Acres: 1.28
Acres USAB:1.28
Acres WATE: 0.00
Acres ROW: 0.00
Sq Ft: 55,917.34
Owner
Primary Owner
HICKMAN ENTERPRISES LLC
208 DUNDAS RD
MONTICELLO MN 55362
Land
Buildings
Building 1
Unit
Eff
Architecture
Seq Code
CER Dim 1 Dim 2 Dim 3 Units UT
Price
Adj 1 Adj 2 Adj 3 Rate Div%
Value
1 INDUSTRIAL I
0 0 0 0 55,917.000 S
4.500
0.00 0.00 0.00 4.500 1.000
251,600
3 BLACKTOP FAIR
0 0 0 0 22,100.000 U
1.500
0.00 0.00 0.00 1.502 1.000
33,200
Total
55,917.000
Roof Structure
GABLE/HIP
284,800
Buildings
Building 1
Year Built
1999
Architecture
N/A
Above Grade Living Area
0
Finished Basement Sgft
0
Construction Quality
04
Foundation Type
N/A
Frame Type
(S) Pre -Engineered Steel
Size/Shape
DUNDAS,
Exterior Walls
STEEL PNL
Windows
N/A
Roof Structure
GABLE/HIP
Roof Cover
STEEL
Interior Walls
N/A
Floor Cover
N/A
Heat
SPACE HEAT
Air Conditioning
N/A
Bedrooms
0
Bathrooms
N/A
Gross Building Area
12000
Sales
https://beacon.schneidercorp.com/Application.aspx?APPID=187&LaverlD=2505&PageTvpelD=4&PagelD=1310&KevValue=155188001020 1/4
Adjusted
Multi Instr Qualified Sale
Sale Sale
eCRV Sale SS. S.S. Rjt. Transact
Parcel Type Sale Sale Date Book Page Type Buyer
Seller
Price Price
# eCRV Type Rcmd. Rsn. Num
N WD Q 11/27/2018 1- HICKMAN
208
$525,000 $525,000
898015 1 NA -
Improved ENTERPRISES,
DUNDAS,
NOT
LLC
LLC
APPLIC
https://beacon.schneidercorp.com/Application.aspx?APPID=187&LaverlD=2505&PageTvpelD=4&PagelD=1310&KevValue=155188001020 1/4
4/4/24, 4:09 PM
Recent Sales In Area
Sale date range:
From: 04/04/2021 To: 04/04/2024
Sales by Subdivision
1500 Feet v Sales by Distance
Beacon - Wright County, MN - Report: 155188001020
Transfer History
Grantor
208 DUNDAS LLC
BLUE CHIP DEVELOPMENT COMPANY LLP
BLUE CHIP DEVELOPMENT COMPANY, FIRST NATIONAL BANK OF ELK RIVER
Note: Transfer History data is from Landl-ink beginning 01/01/2003.
Valuation
Grantee
HICKMAN ENTERPRISES LLC
208 DUNDAS LLC
BLUE CHIP DEVELOPMENT
Recorded Date
Doc Type
Doc No
12/4/2018
WAR
1385537
10/3/2006
QCD
1027905
3/30/2006
PLT
1003888
Taxation
2024 Assessment
2023 Assessment
2022 Assessment
2021 Assessment
2020 Assessment
+ Estimated Land Value
$284,800
$208,300
$163,400
$141,600
$141,600
+ Estimated Building Value
$647,100
$588,300
$449,400
$408,400
$408,400
+ Estimated Machinery Value
$0
$0
$0
$0
$0
= Total Estimated Market Value
$931,900
$796,600
$612,800
$550,000
$550,000
% Change
16.98%
29.99%
11.42%
0.00%
7.21%
Taxation
Taxes Paid
Receipt #
2023 Payable
2022 Payable
2021 Payable
Estimated Market Value
$612,800
$550,000
$550,000
- Excluded Value
$0
$0
$0
- Homestead Exclusion
$0
$0
$0
= Taxable Market Value
$612,800
$550,000
$550,000
Net Taxes Due
$14,180.00
$14,100.00
$14,050.00
+ Special Assessments
$0.00
$0.00
$0.00
= Total Taxes Due
$14,180.00
$14,100.00
$14,050.00
% Change
0.57%
0.36%
5.72%
Taxes Paid
Receipt #
Receipt Print Date
Bill Pay Year
Amt Adj
Amt Write Off
Amt Charge
Amt Payment
1786347
9/8/2022
2022
$0.00
$0.00
$0.00
($7,050.00)
1747484
4/11/2022
2022
$0.00
$0.00
$0.00
($7,050.00)
1712987
8/2/2021
2021
$0.00
$0.00
$0.00
($7,025.00)
1679794
4/13/2021
2021
$0.00
$0.00
$0.00
($7,025.00)
1639475
8/17/2020
2020
$0.00
$0.00
$0.00
($6,645.00)
1598308
3/24/2020
2020
$0.00
$0.00
$0.00
($6,645.00)
1563044
9/6/2019
2019
$0.00
$0.00
$0.00
($6,483.00)
1519734
4/1/2019
2019
$0.00
$0.00
$0.00
($6,483.00)
1499981
10/15/2018
2018
$0.00
$0.00
$0.00
($5,986.00)
1473980
5/18/2018
2018
$0.00
$0.00
$0.00
($5,986.00)
1430021
11/1/2017
2017
$0.00
$0.00
$0.00
($249.08)
1428623
10/23/2017
2017
$0.00
$0.00
$249.08
($6,227.00)
1391314
5/17/2017
2017
$0.00
$0.00
$0.00
($6,227.00)
1333232
10/18/2016
2016
$0.00
$0.00
$0.00
($6,384.00)
1298689
5/19/2016
2016
$0.00
$0.00
$0.00
($6,384.00)
Photos
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12000sf
80'
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Map
Beacon - Wright County, MN - Report: 155188001020
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SECTION
REFERENCE:
TY OF
M0CI
ticello
FINANCE
City Policy and
Procedure
NO: FIN -
Date:
Next Review Date:
TITLE: GREATER MONTICELLO ENTERPRISE FUND POLICY
1.0 Purpose
The purpose of the Greater Monticello Enterprise Fund ("GMEF") is to encourage economic development
by supplementing conventional financing sources available to existing and new businesses. This program
is administered by the City of Monticello Economic Development Authority (the "EDA") and participating
lending institution(s). GMEF loans are made to businesses to help them meet a portion of their financing
needs. The loans are meant to be a secondary source of financing, provide gaps in private financing, and
assist in securing other grants. All loans must meet four or more of the criteria established in the Definition
of Public Purpose section below.
The Greater Monticello Enterprise Fund is administered by the EDA. It is the responsibility of the EDA to
assure that loans meet the public purpose standard and comply with all other GMEF policies as defined in
this document.
DEFINITION OF PUBLIC PURPOSE
GMEF Loans must meet at least one (1) of the following public purposes (if the EDA finds that the public
purpose described in item 2 listed below is met, the EDA must find that the GMEF loan meets at least one
additional public purpose listed below):
1. To provide loans for credit -worthy businesses which create new jobs.
• One job is equivalent to a total of 37.5 hours per week.
• At least 90% of the jobs created must pay at least 160% of the federal minimum wage,
exclusive of benefits, for individuals over the age of 20 during the term of assistance. Annual
written reports are required until repayment of the assistance. Failure to meet the job and
wage level goals requires partial or full repayment of the assistance with interest.
2. To provide loans for credit -worthy businesses that would increase the community tax base.
3. To provide loans to credit -worthy industrial or commercial businesses (new or existing) that
would allow the ability to improve or expand their operation. Factors including but not limited
to the following will be taken into account:
• Type and size of the business
• Product or service involved
• Present availability of the product or service within the City of Monticello
• Compatibility of the proposed business as it relates to the comprehensive plan and existing
zoning policies,
• Potential for adverse environmental effects of the business, if any.
4. In the event job creation is not a viable option, credit -worthy businesses have the ability to
demonstrate public purpose by means of job retention.
2.0 Policy
Eligible Businesses:
• Industrial and commercial businesses.
• Businesses currently located or to be located within the City of Monticello.
• Credit -worthy existing businesses.
• Start-up businesses with worthy business plan and/or pro forma in a form acceptable to the EDA
(historically non credit -worthy businesses will be denied).
Acceptable Private Financing Methods:
• Companion Direct Loan: The GMEF is subordinate to the primary lender.
• Participation Loan: The GMEF participates in a portion of the loan.
• Guarantee Loans: The GMEF guarantees a portion of the bank loan.
*Interest rate cap is subject to EDA approval
Acceptable Uses of GMEF Proceeds:
• Real property acquisition, development, & rehabilitation improvement costs including but not
limited to the following:
■ Land Acquisition
■ Engineer/Design Inspection Fees
■ Building Permit Fees
■ Architect Fees
■ Building Materials
■ Soil Borings
■ Construction Labor
■ Appraisal Fees
■ Landscaping
■ Legal Fees
■ Grading
■ Environmental Studies
■ Curbing/Parking Lot
■ Recording Fees
■ Title Insurance
• Machinery and equipment: Personal property used as an integral part of the manufacturing or
commercial business, with a useful life of at least three years. Acquisition costs would include
freight and sales taxes paid. As a general rule, office equipment would not qualify.
Terms and conditions:
• Loan Size: Minimum of $25,000 and maximum not to exceed 50% of the remaining GMEF balance
• Leveraging: Minimum 60% private/public Non-GMEF, Maximum 30% GMEF, Minimum 10%
equity.
• Loan Term: Personal property term not to exceed life of equipment (possibly up to 10 years). Real
estate property maximum of 10 -year maturity amortized up to 30 years. Balloon payment at 10
years.
• Interest Rate: Fixed rate not less than 2% below prime rate as published in the Wall Street Journal
on date of EDA approval, with a minimum interest rate of 1.0%.
• Loan Fee: Minimum fee of $500 but not to exceed 1.5 % of the total loan. Fees are to be
documented and there shall be no duplication of fees between the lending institution and the
GMEF. Loan fee may be incorporated into project cost. EDA retains the right to reduce or waive
loan fee or portion of loan fee. Fee to be paid by applicant to the EDA within 5 working days after
City Council approval of GMEF loan. The fee is non-refundable.
• Pre -payment Policy: No penalty for pre -payment
• Deferral of Payments:
■ Extending a balloon payment will require a verification letter from two lending
institutions stating the inability to refinance and is subject to approval by the EDA.
■ Monthly payments may be deferred for a determined period of time upon approval by
the EDA.
• Late Payment Policy: Failure to pay principal or interest when due may result in the loan being
immediately called. In addition to any other amounts due on any loan, and without waiving any
right of the Economic Development Authority under any applicable documents, a late fee of $250
will be imposed on any borrower for any payment not received in full by the Authority within 30
calendar days of the date on which it is due. Furthermore, interest will continue to accrue on any
amount due until the date on which it is paid to the Authority, and all such interest will be due
and payable at the same time as the amount on which it has accrued.
• Assumability of Loan: None
• Business Equity Requirements: Subject to type of loan. The EDA will determine appropriate and
applicable business equity requirements on a case by case analysis, utilizing normal lending
guidelines.
• Collateral:
■ Liens on real property in project (mortgage deed).
■ Liens on real property in business (mortgage deed).
■ Liens on real property held personally (subject to EDA approval, homestead exempt).
■ Machinery and equipment liens (except equipment exempt from bankruptcy).
■ Personal and/or corporate guarantees (requires unlimited personal guarantees).
• Non -Performance: An approved GMEF loan shall be null and void if funds are not drawn upon or
disbursed within 180 days from date of EDA approval.
• Non -Performance Extension: The 180 -day non-performance date can be extended up to an
additional 120 days, upon approval by the EDA. A written request must be received 30 days prior
to expiration of the 180 -day non-performance date.
• Out of Pocket Fees: Responsibility of the GMEF applicant.
• Equal Opportunity: The Greater Monticello Enterprise Fund is operated as an equal opportunity
program. All applicants shall have equal access to GMEF funds regardless of race, sex, age, marital
status, or other personal characteristics.
• Participating Lending Institution(s):
■ Participating lending institution(s) shall be determined by the GMEF applicant.
■ Participating lending institution(s) shall cooperate with the EDA and assist in carrying out
the policies of the GMEF as approved by the City Council.
■ Participating lending institution(s) shall analyze the formal application and indicate to the
EDA the level at which the lending institution will participate in the finance package.
• Loan Administration: City Staff shall collect applicable GMEF payments. City Staff shall assure City
compliance with all applicable terms and conditions of the approved loan. All loan documents
shall include the following: (i) Definition of loan default, agreements regarding notification of
default; (ii) copy of primary lenders documents and (iii) provisions allowing the City to inquire on
the status of the primary loan.
LOAN APPLICATION PROCEDURES
The EDA desires to make the GMEF loan application process as simple as possible. However, certain
procedures must be followed prior to EDA consideration of a loan request. Information regarding the
program and procedures for obtaining a loan are as follows:
City Staff: City Staff shall carry out GMEF operating procedures as approved by the EDA and City Council.
Staff is responsible for assisting businesses in the loan application process and will work closely with
applicants in developing the necessary information.
Application Process:
1. Applicant shall complete a preliminary loan application. Staff will review application for
consistency with the policies set forth in the Greater Monticello Fund Guidelines.
2. If applicant gains initial support from lending institution and if the preliminary loan application is
approved, applicant is then asked to complete a formal application. Formal application shall
include a business plan which will include its management structure, market analysis, and
financial statement. Like documentation necessary for obtaining the bank loan associated with
the proposal is acceptable. Attached with each formal application is a written release of
information executed by the loan applicant
3. If the preliminary loan application is not approved by staff, the applicant may request that the
EDA consider approval of the preliminary application at the next regularly scheduled meeting of
the EDA.
4. City staff shall analyze the formal application and financial statements contained therein to
determine if the proposed business and finance plan is viable. City staff shall submit a written
recommendation to the EDA. A decision regarding the application shall be made by the EDA within
60 days of the submittal of a completed formal application.
5. The EDA shall have authority to approve or deny loans; however, within 21 days of EDA action,
the City Council may reverse a decision by the EDA, if it is determined by the City Council that such
loan was denied/approved in violation of GMEF guidelines.
6. Prior to issuance of an approved loan, the EDA Attorney shall review and/or prepare all contracts,
legal documents, and inter -creditor agreements. After such review is complete, the City shall issue
said loan.
REPORTING: City Staff shall submit to the EDA and City Council a semiannual report detailing the balance
of the Greater Monticello Enterprise Fund.
3.0 Scope
This policy applies to all projects that apply for and may receive GMEF assistance.
4.0
HISTORY
Approval Date:
August 31, 1999
Approved by:
City Council
Amendment Date:
November 8, 2000
Approved by:
City Council
Amendment Date:
April 24, 2001
Approved by:
City Council
HISTORY
Amendment Date
December 13, 2005
Approved by:
City Council
Approval Date
March 23, 2009
Approved by:
City Council
Approval Date
April 22, 2013
Approved by:
City Council
Approval Date
February 27, 2017
Approved by:
City Council
Approval Date
Approved by:
City Council
At a minimum, the EDA shall review the guidelines on an annual basis. Changes to the GMEF guidelines
require approval by the City Council and the EDA.
EDA Agenda: 4/10/24
5C. Consideration of EDA Authority Grant partial Disbursement and Certificate of
Completion — Block 52 Holdings, LLC for Block 52 Mixed Use Redevelopment in the
amount of $290,000
Prepared by:
Meeting Date:
❑x Regular Agenda Item
Economic Development Manager
4/10/24
❑ Consent Agenda Item
Reviewed by:
Approved by:
Community Development Director,
City Administrator
Finance Director, Community &
Economic Development Coordinator
ACTION REQUESTED
Motion to execute the Certificate of Completion for Block 52 Mixed -Use Redevelopment
Project, and authorize disbursement of the Authority Grant funding in the amount of $290,000
to Block 52 Holdings, LLC as authorized in the Purchase and Development Contract, contingent
on satisfaction of items listed on the Temporary Certificate of Occupancy (CO) issued by City
Building Official on February 1, 2024, and resolution of remaining applicable conditions of the
Block 52 Planned Unit Development approval.
Motion of other.
REFERENCE AND BACKGROUND
The EDA is asked to consider authorizing the execution of the Certificate of Completion for the
Block 52 Mixed Use Redevelopment project and further approve the "Authority Grant" funding
a partial disbursement in the amount of $290,000 to Block 52 Holdings, LLC, contingent on
satisfactory completion of items listed on the Temporary Certificate of Occupancy (CO) and
resolution of remaining conditions of Planned Unit Development approval.
The Purchase Agreement and Private Development Contract for Block 52 includes the provision
for an "Authority Grant" as additional funding support for public purpose expenditures. These
expenditures are identified in the contract and include items such as sidewalk, parking lot and
streetscape improvements.
The developer recently requested consideration of a partial disbursement of the Authority
Grant dollars. The developer submitted paid invoices exceeding the $367,400 available in
Authority Grant funding (Schedule F in the Development Contract). Although the invoices total
more than the Authority Grant eligible costs, a portion of the work on the eligible items
remains. As such, full reimbursement is not proposed at this time. It is anticipated that the
developer will have additional invoices to submit for a final funding disbursement for the
eligible items once they complete the remaining work tasks in the coming weeks.
EDA Agenda: 4/10/24
Per the executed Purchase and Development Contract for Block 52, prior to approving a
disbursement of the Authority Grant, it is required that the developer receive from the EDA a
Certificate of Completion. The Certification of Completion verifies that the Minimum
Improvements on site have been completed. It is further required by the contract that the
Developer be in compliance with the Planning Development Contract, which corresponds to the
PUD conditions of approval.
The developer received a Temporary CO from the City Building Official on February 1, 2024. The
CO allowed the developer to lease out residential units effective in February. While about 40 of
the 87 apartment units have been leased, there are several important work components of the
development that are not yet completed as related to the Minimum Improvements. These
items are listed in the Temporary Certificate of Occupancy issued by the Building Official, as
well as a small set of items outstanding in the land use approval list of conditions.
Staff have been discussing the timeline for completion of these items with the developer and
have learned that these final items are being scheduled for completion over the next three to
five weeks.
I. Budget Impact: The budget impact from the consideration of the Authority Grant is
minimal. The EDA has a contractual obligation to disburse the Authority Grant to the
developer once it issues a Certificate of Completion. The Authority Grant being considered
for disbursement at this time is $290,000. The total Authority Grant authorized in the
Development Contract is $367,400. The funds are being drawn from pooled TIF District
Funds.
II. Staff Workload Impact: The Community Development Director, Finance Director and
Economic Development Manager have committed time to completing tasks related to the
review of the Authority Grant request. Additional time toward this effort involves report
preparation and EDA meeting presentation. No other staff are required to complete the
work in this effort.
III. Comprehensive Plan Impact: N/A
STAFF RECOMMENDATION
Staff recommend that the Certificate of Completion be authorized contingent on satisfactory
completion of the list of unfinished work items included in the Building Department C.O and
Planned Unit Development Contract. The EDA may also choose to authorize the disbursement
of the Authority Grant pending satisfactory completion of the work items and issuance of the
Certificate of Completion. If the EDA desires to motion these related items as separate
Actions, that would be acceptable to staff.
EDA Agenda: 4/10/24
SUPPORTING DATA
A. Certificate of Completion — Unsigned
B. Authority Grant Invoice Submittal and Payment Claim Voucher Packet
C. Authority Grant Except from Development Contract
D. Certificate of Occupancy
SCHEDULE C
FORM OF CERTIFICATE OF COMPLETION
CERTIFICATE OF COMPLETION
WHEREAS, the City of Monticello Economic Development Authority (the "Authority") and
Block 52 Holdings LLC, Buchholz Exchange LLC, and Norgren Exchange LLC (collectively, the
"Redeveloper") entered into a certain Purchase and Development Contract dated September 16, 2022
(the "Contract"), recorded at the office of the County Recorder of Wright County as Document No.
and
WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles
III and IV thereof related to constructing certain Minimum Improvements; and
WHEREAS, the Redeveloper has performed said covenants and conditions insofar as it is
able in a manner deemed sufficient by the Authority to permit the execution and recording of this
certification;
NOW, THEREFORE, this is to certify that all construction and other physical improvements
related to the Minimum Improvements specified to be done and made by the Redeveloper have been
completed and the agreements and covenants in Articles III and IV of the Contract relating to such
construction have been performed by the Redeveloper, and this Certificate is a conclusive
determination of the satisfactory termination of the covenants and conditions of Articles III and IV of
the Contract related to completion of the Minimum Improvements, but any other covenants in the
Contract shall remain in full force and effect.
MN l 90\159\822825.v2 C-1
Dated: , 20 .
STATE OF MINNESOTA )
SS.
COUNTY OF WRIGHT )
CITY OF MONTICELLO ECONOMIC
DEVELOPMENT AUTHORITY
Authority Representative
The foregoing instrument was acknowledged before me this day of
20_, by the of the City of Monticello
Economic Development Authority, a public body corporate and politic under the laws of the State
of Minnesota, on behalf of the authority.
Notary Public
This document was drafted by:
KENNEDY & GRAVEN, Chartered (GAF)
150 South 5th Street, Suite 700
Minneapolis, MN 55402
Telephone: (612) 337-9300
(Signature page to Certificate of Completion)
MN 190\159\822825.v2 C-2
2.I
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CITY OF MONTICELLO
VOUCHER
Please complete, sign, and submit to Accts Payable by due date for check run.
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in grants from the State. The Redeveloper agrees to list all job vacancies in the Redeveloper's personnel
complement with MinnesotaWorks.net at www.minnesotaworks.net.
(g) Without limiting its obligations under Section 8.3 hereof, Block 52 LLC, Buchholz
LLC and Norgren LLC agree, jointly and severally, to indemnify, defend, and hold harmless the
Indemnified Parties from any claims or causes of action, including attorney's fees incurred by the
Indemnified Parties, arising from the performance of the DEED Grant Agreement by the
Redeveloper, or its officers, agents or employees. Block 52 LLC, Buchholz LLC and Norgren LLC
will, jointly and severally, further indemnify, defend, and hold harmless the Indemnified Parties
from any claims or causes of action, including attorney's fees incurred by the Indemnified
Parties, arising from the performance of or any obligations under the DEED Grant Agreement,
including without limitation any obligation to pay or repay any amounts to DEED. Block 52
LLC, Buchholz LLC and Norgren LLC further covenant and agree, jointly and severally, to repay
the DEED Grant to DEED, should the Authority be required to repay the DEED Grant pursuant
Minnesota Statutes 116J.575, subdivision 4 or the DEED Grant Agreement. Block 52 LLC,
Buchholz LLC and/or Norgren LLC shall repay any amounts required under this paragraph (g)
upon 30 days of a written request from the Authority.
Section 3.11 Other Assistance, In addition to the reimbursement of a portion of
Redeveloper's Public Redevelopment Costs through issuance of the TIF Note and the reimbursement
of a portion of the Redeveloper's DEED Redevelopment Costs with the proceeds of the DEED Grant,
the Authority will reimburse a portion of the Redeveloper's redevelopment costs and additional
environmental investigation costs detailed in Schedule G (the "Authority Grant Costs") to be
undertaken on the Redevelopment Property, pursuant to and in conformity with the Authority's
Policy Statements for Management of Available Tax Increment Financing Funds, adopted by the
Authority on January 10, 2018, the 2022 Pooled TIF Allocation Plan, adopted on May 25, 2022 and
the TIF Act from pooled tax increment from Tax Increment Financing District Nos. 1-6, 1-20, 1-22
and 1-34. The grant shall be in the amount of $367,400 (the "Authority Grant") and shall be disbursed
to the Redeveloper upon the occurrence of the following:
(i) The Redeveloper having delivered to the Authority evidence of Authority Grant
Costs paid or incurred in at least the principal amount of the Note as well as one or more
certificates signed by the Redeveloper's duly authorized representative, containing the
following: (A) a statement that each cost identified in the certificate is a Authority Grant Cost
as defined in this Agreement and that no part of such cost has been included in any previous
certification; (B) reasonable evidence that each identified Authority Grant Cost has been paid or
incurred by or on behalf of the Redeveloper; and (C) a statement that, to the Redeveloper's
knowledge, no uncured Event of Default by the Redeveloper has occurred and is continuing
under this Agreement; the Authority may, if not satisfied that the conditions described herein
have been met, return any certificate with a statement of the reasons why it is not acceptable and
requesting such further documentation or clarification as the Authority may reasonably require;
and
(ii) The Redeveloper having received from the Authority the Certificate of
Completion for the Minimum Improvements; and
21
MN190\159\822825.v2
(iii) The Authority has received evidence that the projects for which the Authority
Grant are being provided have been constructed and accepted by the City and the Authority has
confirmed that the Redeveloper is in compliance with Planning Development Contract,
including but not limited to the provisions therein relating to the projects consisting of the
Authority Grant Costs.
The Redeveloper shall be responsible for all Authority Grant Costs in excess of $367,400.
Section 3.12 Business Subsidy Act.
(a) Public Purpose. In order to satisfy the provisions of the Business Subsidy Act, the
Redeveloper acknowledges and agrees that the amount of the "Business Subsidy" granted to the
Redeveloper under this Agreement is the Land Write Down, the TIF Note, the DEED Grant, and the
Authority Grant, and that the Business Subsidy is needed because the construction of the Minimum
Improvements is not sufficiently feasible for the Redeveloper to undertake without the Business
Subsidy due to the extraordinary costs of land acquisition, demolition, hazardous material
remediation, and site improvements necessary to construct the Minimum Improvements on the
proposed site. The public purpose of the Business Subsidy is to redevelop land in the City's
downtown which is underutilized or characterized by blight, increase the tax base of the City and the
State, increase jobs in the City and State (including construction jobs), and help provide a range of
housing options in the City.
(b) Operation of Site. The Redeveloper must continue operation of the Minimum
Improvements as a mixed-use development (the "Qualified Facility") for at least 5 years after the
Benefit Date (defined hereinafter), subject to the continuing obligation described in Section 10.3 of
this Agreement. The improvements will be a Qualified Facility as long as the Minimum
Improvements is operated by the Redeveloper for the aforementioned qualified uses. During any
period when the Minimum Improvements is vacant and not operated for the aforementioned qualified
uses, the Minimum Improvements will not constitute a Qualified Facility.
(c) Job and Wage Goals. The "Benefit Date" of the assistance provided in this
Agreement is the earlier of the date of issuance of the Certificate of Completion or the date the
Minimum Improvements is occupied by Redeveloper. By or before the "Compliance Date", defined
as the date two years after the Benefit Date, the Redeveloper shall cause to be created at least 45 full-
time jobs permanent to the Redevelopment Property. The Redeveloper shall cause the hourly wage
of the new jobs to be at least $12.39 per hour, with benefits equal to at least $1.75 per hour.
Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph
are met by the Compliance Date, those goals are deemed satisfied despite the Redeveloper's
continuing obligations under Sections 3.12(b). The Authority may, after 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 regarding this matter.
(d) Remedies. If the Redeveloper fails to meet the goals described in Section 3.12(b) and
3.12(c), the Redeveloper shall repay to the Authority upon written demand from the Authority a "pro
rata share" of the outstanding principal amount of the TIF Note and the Authority Grant together with
interest on that amount at the implicit price deflator as provided in Section 116J.994, subd. 6 of the
Business Subsidy Act, accrued from the date of substantial completion of the Minimum
22
MN 190\159\822825.v2
SCHEDULE F
AUTHORITY GRANT COSTS
Estimated Costs for the Authority Grant Items are shown below.
The total Authority Grant is not to exceed (capped at) $367,400. The
Redeveloper shall be responsible for all costs in excess of $367,400.
Parking Paving
Parking Lot Excavation
Internal Sidewalk and Landscaping
Street Sidewalks
Plaza Concrete and Landscaping
ROW Landscape/Streetscape
Environmental Study — Phase II
F-1
MN190\159\822825.\,2
$80,000.00
$80,000.00
$80,000.00
$55,000.00
$55,000.00
$55,000.00
$15,400
$420,400
CERTIFICATION
Block 52 Mixed -Use Redevelopment "Authority Grant"
A financing component of the TIF District No. 1-43 Purchase and Development Contract
as per Section 3.11
Authority Grant Funding to be disbursed upon occurrence of the following:
I, Mark Buchholz, Block 52 Holdings, LLC, and duly representing participating developer partners, Norgren
Exchange, LLC and Buchholz Exchange, LLC do hereby certify that each cost identified in the Authority Grant
Disbursement Request/Reimbursement packet is related to the completion of necessary and critical
components such as parking lots, sidewalks, landscaping, etc., all of which are included in the identified
costs outlined in Schedule F of the Purchase and Development Contract entered into with the City of
Monticello Economic Development Authority (EDA) on September 16, 2022, and that no part of such cost
has been included in any previous Authority Grant Disbursement Request and Certification; and do further
certify that each identified cost has been paid or incurred by or on behalf Block 52 Holdings, LLC or its
partners; and that to my knowledge, no uncured Event of Default by Block 52 Holdings, LLC or its partners
involving the Block 52 Mixed Use Redevelopment project (87 residential units plus 30,000 square feet of
ground floor commercial space) has occurred and is continuing under this Agreement.
Schedule F Authority Grant Eligible Costs
Parking Paving
$80,000
Parking Lot Excavation
$80,000
Internal Sidewalk and Landscaping
$80,000
Street Sidewalks
$55,000
Plaza Concrete and Landscaping
$55,000
ROW Landscape/Streetscape
$55,000
Environmental Study — Phase II
$15.400
Total Eligible Costs $420,400
Signature: Date: 4/2/24
Mark Buchholz, ock 52 Holdings, LLC
Rolstad Construction
1855 20TH ST SE
BUFFALO, MN 55313
Phone # 763-682-3765 Fax # 763-682-6764
F666 H-*W0Kz PROPERTIES I
I MARK BUCHHOLZ
385410TH ST N
FARGQ, ND 58102 ,
I
2
5
Description
MONTICELLO BLOCK 52
Project
�4
MONTICELLO BLDG, BLK 52
Invoice
Date Invoice #
11/1/2023 2348
1/3
Terms
Net 15
Amount
GRADE OUT PARKING LOT PER QUOTE & PREPARE FOR CURB & GUTTER 60,000.00
LEVEL AND SPREAD: 1,880 YARDS CON BIT & C-5 @ 3.00/YD 5,640.00
GRAVEL C-5 BROUGHT IN: 1,078 YARDS @14.75/YD+5%Ck��t�estQPCI(f 17,927.00
KOLLES 5.75 HRS @ $125/HOUR 718.75
ROLSTAD: 9.5 HRS @ $120/HOUR 1,140.00
TRENCH DRAIN FOR RAMP: $4,145.75 +5% - ► r,—,55 $,r&V— rS Kid �>&^-s1�_t>V> q4W 4,353.04 �
INSTALLATION FOR POST `� 300.00
Sales Tax 0.00
-' 71 DC (10) aa;�3
CV -7 4-
Total $90,078.78
KOLLES SAND dr GRAVEL, INC.
7203 Ames Avenue NW
Buffalo, MN 55313 Invoice
10/30/2023 18296
ROLSTAD CONSTRUCTION CO.
1855 20th Street S.E.
Buffalo MN 55313
i
i
i
Terms.
Net 30
Date
Qty.
Description
Rate
Mount
Ticket #045698- Block 52
10.04.23
E
350
z Yds. C-5 Delivered
E
14.75
5,162.50T
I
i
Ticket #045701- Block 52
10.05.23
392
Yds. C-5 Delivered
14.75
5,782.00T
i
j Ticket #045707- Block 52
10.11-12.23
336
1 Yds. C-5 Delivered
14.75
4,956.00T
10.25.23
2.75
Hours K 1 Quad Hauling Sand Out
125.00
343.75
3
f Firs. K4 Quad Hauling Sand Out
i
i
125.00
1
375.00
Sales Tax (7.375%) $1,172.66
Phone #
Total $17,791.91 �
320-963-6844J-7
f
44
7203 Ames Ave NW,- Buffalo, MN 55313
Phone(320)963-6844
Bill To
ROLSTAD CONSTRUCTION CO.
I955 20th Street S.E.
Buffalo MN 55313
Invoice
Date Invoice #
5/31/2023 17816
Accounts not paid in full within 30 days are subject to a finance charge of 1.5% per month (ahnual percentage rate of 19%);$1.00 minimum charge.
RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS
Dated:
The undersigned hereby acknowledges receipt of the sure of -$24-3,302.2-S (2318, 2338, 2348)
Invoices: #231.8 ($62,673.45) #23a ($90,554.00) #2348 ($90,078.79)
1)21 -as partial payment for labor, skill, and material furnished.
2) as full and final payment for all labor, skill, and material furnished or to be furnished to
the following described real property:
Block 52
101 West Broadway
Monticello MN 55362
and for value received hereby waives all rights acquired by the undersigned to file or record mechanic's
liens against said real property for labor, skill, or material furnished to said real property (only for the
amount paid if Box 1 is checked.) The undersigned affirms that all material furnished by the undersigned
has been paid for, and all subcontractors employed by the undersigned have been paid in full, EXCEPT:
NONE
Note: If this instrument Is executed by a
corporation, it must be signed by an officer,
and if executed by a partnership, it must be
signed by a partner.
h \1� 1 kY-kA-X-
By (signature)
Company Name
PLEASE SIGN AND RETURN TO:
Sara Kosobud
EMAIL: sara6bbuch1trop.corn Address
Tide
City, State Zip
Kasella Concrete, Inc.
Invoice
6191 330th Ave
Date
Invoice #
Pierz, MN 56364
Phone # (320)-355-2926 Fax # (320)-355-2385
11/20/2023
12342
Bill To Job Name
BUCHHOLZ PROPERTIES BLOCK 52
3010 SHEYENNE WAY
WEST FARGO ND 58078
DdSdfipflOn
Bid Amt
Prior Amt
Prior %
Curr % Tota! %
Amount
EXTERIOR
524,813.00
468,076.00
9.19%
1.91% 91.10%
10,000.00
C/093 - RETAINING WALLS
286,747.00
207,146.00
72.24%
27.76% 100.001/a
79,601.00
Total
$89,601.00
Payments/Credits
$0.00
Thank You
Balance Due
$89,601.00
Bank Forward
RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS
Dated:
The undersigned hereby acknowledges receipt of the sum of $890601.00
1)_ALas partial payment for labor, skill, and material furnished.
2J as full and final payment for all labor, skill, and material furnished or to be furnished to
the following described real property:
Block 52
101 West Broadway
Monticello MN SS362
and for value received hereby waives all rights acquired by the undersigned to file or record mechanic's
liens against said real property for labor, skill, or material furnished to said real property (only for the
amount paid if Box 1 is checked.) The undersigned affirms that all material furnished by the undersigned
has been paid for, and all subcontractors employed by the undersigned have been paid in full, EXCEPT:
NONE
Note: If this instrument is executed by a
corporation, it must be signed by an officer,
and if executed by a partnership, it must be
signed by a partner.
PLEASE SIGN AND RETURN TO:
Sara Kosobud
)EMAIL: ra j1uchRrgS1xgID
By (si ure)
asp`�--
Company Name Title
to L --7 1 - 3
Address
5oL>
City, State zip
Bank Forward
RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS
Dated: '1
The undersigned hereby acknowledges receipt of the sum of $ / ,,?, r L57&,
1) as partial payment for labor, skill, and material furnished.
2) as full and final payment for all labor, skill, and material furnished or to be furnished to
the following described real property:
Block 52
101 West Broadway
Monticello MN
and for value received hereby waives all rights acquired by the undersigned to file or record mechanic's
liens against said real property for labor, skill, or material furnished to said real property (only for the
amount paid if Box 1 is checked.) The undersigned affirms that all material furnished by the undersigned
has been paid for, and all subcontractors employed by the undersigned have been paid in full, EXCEPT:
NONE
Note: if this instrument is executed by a
corporation, it must be signed by an officer,
and if executed by a partnership, it must be
signed by a partner.
PLEASE SIGN AND RETURN TO:
Sara Kosobud
EMAIL: sarc�c�l���chprry
By (signature)
L 61,
Company Name
'7"
City, State
r
Title
Zip
Hanson Paving
3636 Quail Rd NE
Sauk Rapids, MN 56379
320-259-7874
Buchholz Properties
Josh Thieschafer
Invoice
Date
Invoice #
11/13/2023
38746
PAVING
Terms
Due on receipt
Description
Qty
Rate
Monticello Block 52 Apartments
Total $71 000.00
,
are not warrantied.
1/
Pine Street & River Street est
**New asphalt may be driven ACROSS after 2 to 3 days but not parked on.
**It can take up to 2 years for asphalt to fully cure hard.
**New asphalt may be parked on after 14 days but be careful on sunny days as the asphalt when curing will get soft.
**Do NOT put tables and chairs on newly laid asphalt.
Lot - Approximately 45,000 sq feet
2" Bituminous Base I I t(J CIQ
68,500.0
68,500.00
Cash, check, credit/debit card accepted. Please note a 2%
processing fee will be applied to any credit/debit card transactions.
Hanson Paving - Asphalt Warranty
5 year warranty on major deterioration of asphalt
1 year warranty on spider cracking
Within the first year it is possible for the asphalt to get one or two single relief cracks - these
Total $71 000.00
,
are not warrantied.
Warranty does not apply to patches and asphalt repairs.
**New asphalt may be driven ACROSS after 2 to 3 days but not parked on.
**It can take up to 2 years for asphalt to fully cure hard.
**New asphalt may be parked on after 14 days but be careful on sunny days as the asphalt when curing will get soft.
**Do NOT put tables and chairs on newly laid asphalt.
Hanson Paving
3636 Quail Rd NE
Sauk Rapids, N4N 56379
320-259-7874
Buchholz Properties
Josh Thieschafer
Invoice
Date
Invoice #
6/12/2023
38059
Terms
Due on receipt
Description
Qty
Rate
Amount
By 107 West Broadway St Monticello
Total
7,000.00
7,000.00
2100 Sq Ft
Warranty does not apply to patches and asphalt repairs.
Price includes: Pave 4" new asphalt - 52 tons
**It can take up to 2 years for asphalt to fully cure hard.
**New asphalt may be parked on after 14 days but be careful on sunny days as the asphalt when curing will get soft.
**no NOT put tables and chairs on newly laid asphalt.
Cash, check, credit/debit card accepted. Please note a 2%
processing fee will be applied to any credit/debit card transactions.
Y
Hanson Paving - Asphalt Warranty
5 year warranty on major deterioration of asphalt
I year warranty on spider- cracking
Total
Within the first year it is possible for the asphalt to get one or two single relief cracks - these
$7,000.00
are not warrantied.
Warranty does not apply to patches and asphalt repairs.
"New asphalt may be driven ACROSS after 2 to 3 days but not parked on.
**It can take up to 2 years for asphalt to fully cure hard.
**New asphalt may be parked on after 14 days but be careful on sunny days as the asphalt when curing will get soft.
**no NOT put tables and chairs on newly laid asphalt.
Bank Forward
RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS
Dated: 3-7�,-)[J.
The undersigned hereby acknowledges receipt of the sum of $75,500.00 (30059& 38746)
Invoices: #38059 ($7,000.00) 1138746 ($68,500,00)
I) as partial payment for labor, skill, and material furnished,
2) y as full and final payment for all labor, skill, and material furnished or to be furnished to
the following described real property:
Block 52
101 West Broadway
Monticello MN 55362
and for value received hereby waives all rights acquired by the undersigned to file or record mechanic's
liens against said real property for labor, skill, or material furnished to said real property (only for the
amount paid if Box I is checked.) The undersigned affirms that all material furnished by the undersigned
has been paid for, and all subcontractors employed by the undersigned have been paid in full, EXCEPT:
NONE
Note: if this instrument is executed by a
corporation, it must be signed by an officer,
and if executed by a partnership, it must be
signed by a partner.
PLEASE SIGN AND RETURN To'
$ara Kosobud
kh IL: sara6VhuchVrQjt3
By (si cure)
ckwson 2,
Company Name Title
3 to3Ar Qu-cc'+t Pa N E
Address
GaL,L ',Jbe MO 5(,37
City, State Zip
Johnson -Nelson Masonry, Inc.
I I ( 102 E Hwy 82 - PO Box 180
ASHBY, MN 56309
(218) 747-2071
Buchholz Properties
3010 Sheyenne River Way
West Fargo, ND 58078
BLOCK S2
Brick and Cast Stone Retaining Walls
MATERIAL
Sea Grey 6 Modular Brick
LF Cast Stone Caps
Mortar Batches
801b Spec Mix Grout
Brick Ties/Anchors
2" Foamular Insulation
Saw Blade, Drill Bits, Shims
Popane, Plastic, Lath
LABOR
Bricklayer Foreman Hours
Bricklayer Hours
Laborer Hours
Operator Hours
EQUIPMENT
Forklift Hours
Mileage
SUB
SF Acid Wash
MISC
Mark Up
Thank you for your business.
I i 111 I[ I II i I �" [IN
Invoice
3.2/5/2023 120523-1
1:m -?/I �Q �
G<� jas3
Quantity
Price
Total
29,925
$1.15
$34,413.75
600
$53.69
$32,214.00
300
$35.00
$10,500.00
40
$12.85
$514.00
3,600
$0.58
$2,088.00
54
$57.46
$3,102.84
1
$1,135.07
$1,135.07
1
$788.38
$788.38
154
$108.25
$16,670.50
615
$99.41
$61,137.15
275
$90.90
$24,997.50
152
$96.45
$14,660.40
152
$50.00
$7,600.00
30800
$0.66
$2,508.00
5,600
$1.08
$6,048.00
$21,837.41
TCt h $240,215.00
Bank Forward
RECEIPT AND WAIVER OF MECHANIC'S LIEN RIGHTS
Dated: 3 -27-2-
The
7-L
The undersigned hereby acknowledges receipt of the sum of $240,215.00
1) as partial payment for labor, skill, and material furnished.
2) x as full and final payment for all labor, skill, and material furnished or to be furnished to
the following described real property:
Block 52
101 West Broadway
Monticello MN SS362
and for value received hereby waives all rights acquired by the undersigned to file or record mechanic's
liens against said real property for labor, skill, or material furnished to said real property (only for the
amount paid if Box 1 is checked.) The undersigned affirms that all material furnished by the undersigned
has been paid for, and all subcontractors employed by the undersigned have been paid in full, EXCEPT:
NONE
Note: if this Instrument is executed by a
corporation, it must be signed by an officer,
and if executed by a partnership, it must be
signed by a partner.
QCMQ RETURN TO:
Sara,Koso w
EMAIL: saraf�►buchAr_Q�.com
By (signatu
D6) .F�.
Company Name Title
PLEASE
V0 toy, t�
Address
&"� k 5tx(
City, St Zip
CITY OF MONTICELLO, MN
TAX INCREMENT FINANCING DISTRICT NO. 1-22
REVENUES, EXPENDITURES, AND CHANGES IN TAX INCREMENT BALANCE
REPORTED TO OSA, AS OF FYE2022
BALANCE SHEET
REPORTED TO OSA, AS OF
FYE2022
Total Through
Prior Years 2022 Amount 2022 12/31/2021 12/31/2022
REVENUE ASSETS
TIF distributed from County 6,323,523 296,000 6,619,523 Cash 504,232 437,082
Interest income 639,700 - 639,700 Taxes receivable 4,733 2,687
Loan/advance repayments 56,468 56,468 Investments - -
Market value homestead credit 15,252 15,252 Other receivables - -
Lease proceeds 381,771 - 381,771 Property held for resale* 163,200 163,200
Total Revenue 7,416,714 296,000 7,712,714 Total Assets 672,165 602,969
EXPENDITURES LIABILITIES
Project costs other than PAYGO 3,842,434 171,695 4,014,129 Due to other TIF districts -
Tax increment returned to County 1,707,553 188,360 1,895,913 Due to non -tax increment accounts -
Accounts payable - 6,198
Bond payments: Deferred inflows 2,687
Payments for PAYG note or contract 184 184 Unearned revenues 163,200 163,200
Payments on all other bonds 945,000 945,000 Total Liabilities 163,200 172,085
Interest:
Interest on PAYG 773,640 12,191 785,831 Tax Increment balance 765,717 (76,246)
Interest on all other bonds 209,594 209,594
Interest on interfund loans - - Total Liabilities and TIF Balance 928,917 95,839
Total Expenditures 7,478,405 372,246 7,850,651
Revenues over (under) expenditures (61,691) (76,246) (137,937)
Designation of Ending Fund Balance:
OTHER SOURCE AND USE OF FUNDS Excess increment to be returned to County 180,209
Transfer in Increment available under 25% pooling and 6 -year rule 143,089
Tansfers out (376,179) (376,179) Increment available under 10% pooling for affordable housing 29,600
Bonds issued (other than refunding) 945,000 945,000 Increment not derived from property available for redevelopment 77,986
Refunding bonds issued Total Fund Balance 430,884
Bonds refunded
Bond discount Interfund Loan Balance:
Bond premium Land acquisition
Sales of property Land acquisition in 2015
Total other sources and uses 568,821 568,821 Advance of funds for pooled expenditures
Total Interfund Loan*
NET CHANGE IN TIF BALANCE 507,130 (76,246) 430,884 *EDA Resolution #2014-025 authorized $800,000
Tax increment beginning balance 507,130
Tax increment ending balance 430,884
Q°i0� 15
wvA ODO
NORTHLAND
PURI IC FINANCF
7/10/2023
CITY OF MONTICELLO
TAX INCREMENT FINANCING DISTRICT NO. 1-22
Estimated As of December 31, 2022
Accounted for
in Prior Years Total Life of
Through 2021 2022 Actual 2023 Proj 2024 Proj District
Source of Funds
TIF revenue derived from property in district
6,323,523
296,000
296,000
0 6,915,523
TIF revenue not derived from property in district
1,093,191
-
-
- 1,093,191
Subtotal tax increment
7,416,714
296,000
296,000
- 8,008,714
Bond proceeds
945,000
-
-
- 945,000
507,130
430,884
539,348
-
Change in Fund Balance
Total Source of Funds
8,361,714
296,000
296,000
- 8,953,714
Use of Funds
507,130
430,884
539,348
352,941
Increment spent/committed (within district)
3,077,789
12,191
5,994
0 3,095,974
Bond repayment
945,000
Tax increment collected
945,000
Pooled tax increment expenditures
763,563
-
-
- 763,563
Administrative expenditures
267,488
1,334
1,334
- 270,156
Subtotal
1,031,051
1,334
1,334
- 1,033,719
% of TIF derived from property
16%
0%
0%
0% 14.9%
Pooled tax increment for housing purposes
-
170,361
-
- 170,361
Expenditure of TIF not derived from property
1,093,191
-
-
-
1,093,191
Return of excess tax increment to County
1,707,553
188,360
180,209
186,407
2,262,528
Total Use of Funds
7,854,584
372,246
187,537
186,407
8,600,773
Beginning Fund Balance
-
507,130
430,884
539,348
-
Change in Fund Balance
507,130
(76,246)
108,464
(186,407)
352,941
Ending Fund Balance
507,130
430,884
539,348
352,941
352,941
0
Ending Fund Balance Designations:
Excess increment to be returned to County
188,360
180,209
186,406
-
-
Increment available under 25% pooling
138,631
143,089
215,755
215,755
215,755
Increment available under 10% pooling for housing
170,361
29,600
59,200
59,200
59,200
Increment not derived from property available for redevelopment
9,779
77,987
77,987
77,987
77,987
Total Fund Balance
507,131
430,885
539,349
352,942
352,942
Reconciliation of Excess Increment:
Tax increment collected
296,000
296,000
0
Indistrict % ( City acted to approve 10% pooling for housing in 2015)
65.0%
65.0%
65.0%
Minimum tax increment that must be spent/committed within district
192,400
192,400
0
Less increment spent/committed within district
12,191
5,994
0
Excess increment
180,209
186,407
0
Note: City approved a modification to the TIF Plan on 10/14/2015, Res#2015-010, authorizing an increase in pooling for affordable
housing, providing an additional 10% for pooling.
7/10/2023
NORTHLAND
SECURITIES
CITY OF MONTICELLO, MN
TAX INCREMENT FINANCING DISTRICT NO. 1-22
REVENUES, EXPENDITURES, AND CHANGES IN TAX INCREMENT BALANCE
REPORTED TO OSA, AS OF FYE2022
BALANCE SHEET
REPORTED TO OSA, AS OF
FYE2022
Total Through
Prior Years 2022 Amount 2022 12/31/2021 12/31/2022
REVENUE ASSETS
TIF distributed from County 6,323,523 296,000 6,619,523 Cash 504,232 437,082
Interest income 639,700 - 639,700 Taxes receivable 4,733 2,687
Loan/advance repayments 56,468 56,468 Investments - -
Market value homestead credit 15,252 15,252 Other receivables - -
Lease proceeds 381,771 - 381,771 Property held for resale* 163,200 163,200
Total Revenue 7,416,714 296,000 7,712,714 Total Assets 672,165 602,969
EXPENDITURES LIABILITIES
Project costs other than PAYGO 3,842,434 171,695 4,014,129 Due to other TIF districts -
Tax increment returned to County 1,707,553 188,360 1,895,913 Due to non -tax increment accounts -
Accounts payable - 6,198
Bond payments: Deferred inflows 2,687
Payments for PAYG note or contract 184 184 Unearned revenues 163,200 163,200
Payments on all other bonds 945,000 945,000 Total Liabilities 163,200 172,085
Interest:
Interest on PAYG 773,640 12,191 785,831 Tax Increment balance 765,717 (76,246)
Interest on all other bonds 209,594 .209,594
Interest on interfund loans - - Total Liabilities and TIF Balance 928,917 95,839
Total Expenditures 7,478,405 372,246 7,850,651
Revenues over (under) expenditures (61,691) (76,246) (137,937)
Designation of Ending Fund Balance:
OTHER SOURCE AND USE OF FUNDS Excess increment to be returned to County 180,209
Transfer in Increment available under 25% pooling and 6 -year rule 143,089
Tansfers out (376,179) (376,179) Increment available under 10% pooling for affordable housing 29,600
Bonds issued (other than refunding) 945,000 945,000 Increment not derived from property available for redevelopment 77,986
Refunding bonds issued Total Fund Balance 430,884
Bonds refunded
Bond discount Interfund Loan Balance:
Bond premium Land acquisition
Sales of property Land acquisition in 2015
Total other sources and uses 568,821 568,821 Advance of funds for pooled expenditures
Totallnterfund Loan*
NET CHANGE IN TIF BALANCE 507,130 (76,246) 430,884 *EDA Resolution #2014-025 authorized $800,000
Tax increment beginning balance 507,130 ''`�y
Tax increment ending balance 430,884 �s
Qbo�,�► 15
ODO
�2gD1
NORTHLAND
PURI Ir FINANf F
7/10/2023
CITY OF MONTICELLO
TAX INCREMENT FINANCING DISTRICT NO. 1-22
Estimated As of December 31, 2022
Ending Fund Balance Designations:
Accounted for
Excess increment to be returned to County
in Prior Years
180,209
186,406
-
Total Life of
Increment available under 25% pooling
Through 2021
2022 Actual
2023 Proj
2024 Proj
District
Source of Funds
170,361
29,600
59,200
59,200
59,200
TIF revenue derived from property in district
6,323,523
296,000
296,000
0
6,915,523
TIF revenue not derived from property in district
1,093,191
-
-
-
1,093,191
Subtotal tax increment
7,416,714
296,000
296,000
-
8,008,714
Bond proceeds
945,000
-
-
-
945,000
Indistrict % ( City acted to approve 10% pooling for housing in 2015)
65.0%
65.0%
65.0%
Total Source of Funds
8,361,714
296,000
296,000
-
8,953,714
Use of Funds
12,191
5,994
0
Increment spent/committed (within district)
3,077,789
12,191
5,994
0
3,095,974
Bond repayment
945,000
945,000
Pooled tax increment expenditures
763,563
-
-
-
763,563
Administrative expenditures
267,488
1,334
1,334
-
270,156
C..L-a.-4.-1
JuuLotal
n I I n 5�
1,U31,UJ1
^��
1,334
1,334
-
1,033,719
% of TIF derived from property
16%
0%
0%
0%
14.9%
Pooled tax increment for housing purposes
-
170,361
-
-
170,361
Expenditure of TIF not derived from property
1,093,191
-
-
-
1,093,191
Return of excess tax increment to County
1,707,553
188,360
180,209
186,407
2,262,528
Total Use of Funds
7,854,584
372,246
187,537
186,407
8,600,773
Beginning Fund Balance
-
507,130
430,884
539,348
-
Change in Fund Balance
507,130
(76,246)
108,464
(186,407)
352,941
Ending Fund Balance
507,130
430,884
539,348
352,941
352,941
0
Ending Fund Balance Designations:
Excess increment to be returned to County
188,360
180,209
186,406
-
-
Increment available under 25% pooling
138,631
143,089
215,755
215,755
215,755
Increment available under 10% pooling for housing
170,361
29,600
59,200
59,200
59,200
Increment not derived from property available for redevelopment
9,779
77,987
77,987
77,987
77,987
Total Fund Balance
507,131
430,885
539,349
352,942
352,942
Reconciliation of Excess Increment:
Tax increment collected
296,000
296,000
0
Indistrict % ( City acted to approve 10% pooling for housing in 2015)
65.0%
65.0%
65.0%
Minimum tax increment that must be spent/committed within district
192,400
192,400
0
Less increment spent/committed within district
12,191
5,994
0
Excess increment
180,209
186,407
0
Note: City approved a modification to the TIF Plan on 10/14/2015, Res#2015-010, authorizing an increase in pooling for affordable
housing, providing an additional 10% for pooling.
NORTHLAND
7/10/2023 `' SECURITIES
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Economic Development Authority & Small Cities Development Program
For the Period Ended December 31, 2023 - Unaudited
Revenues
Property taxes
Tax increments
Intergovernmental
Investment eamings
Interest on bans
Other revenues
Total revenues
Expenditures:
Current
Salary and wages
Benefits
Supplies
Professional services- legal
Professional services- other
LPV Insurance
Legal and general publications
Ma*eting
Dues and membership
Utilities
IT services
Travel and conferences
Other expenditures
Excess increments
Interest on Intrafund loans
PAYG payments to third parties
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other financing uses
Transfers in
Net change in fund balances
Fund balance at beginning of year
Fund balance at end of yeas
Required or Actual faeoer86ca11on Data
TIFDlsekt Type
(d)= decertified
138,697
48,091
35
21,780
156,883
3,395
398
5,000
6,796
789
3,473
5,120
295,753
686,210
211.441 3,481
138,697
48,091
35
1,000 - - _ _ _
22,780
- - - - - - - 1,468 400 400 400 400 - 159,951
_ _ _ _ _ _ _ _ 3.395
30 30 30 30 30 30 30 30 224 - - - - - 862
5,000
6.796
789
3.473
5,120
295,753
- - 180,209 - - - - _ _ _
80,209
- - - - - 1,963 - - 29,294 - - - - (31.257) -
- - 63,018 - 63.018
30 30 181,239 30 30 1.993 30 63.048 30.986 400 400 400 400 t31.257) 933,969
29,294 37,719 (30) 88,402 55,800 34,654 15,583 (30) 6.972 34,112 (400) (400) (400) (400)
515,798 41.292
3,950
TIF 6(d)
TIF 19(d) TIF 20(d)
TIF 22(d)
TIF 24
TIF 29
TIF 30
TIF 36(it)
TIF 40
TIF 41 TIF 42 TIF 43 TIF 45
TIF 46 GAAP
Total
Total
EDA General
GMEF
TIF Future Raindance
MS Shores Prairie Wast
Downtown
St. Henry's
Front Porch
CMHP
Interchange
Briggs
UMC Headwaters Heartwaters Block 52
WMa Raconcillatlon
EDA
SCDP
$ 401,807
$ -
S - $ -
S - $ -
$ -
$ -
S _
$ _
$ _
$
$ $ _ $ $
$ $ -
$ 401,807
$ -
-
-
- -
37,749 -
269.641
55.830
34,684
17,576
-
70,020
65,098 - - -
- -
550,598
-
284,123
-
- -
- _
-
$ 37.719
$ 104,142
5 519,286
; 55,800
$ 34,fi54
_ -
- -
284,123
-
206,458
$ (127,fid6)
$ (400)
b 400) 7 163,200
-$-7 405-808
$ 939,501
12811013
- - -
- -
208,4
3],948
1,963
3,481
- 29,294
_
_
-
-
-
-
-
- - - -
- (31,257)
3,48181
3,344
3,300
-
-
- -
-
Housing
Housing
Redevelopment
Housing
Economic
- -
-
3,300
Economic
897,851
3,481
29.294
37,749 -
269,641
55,830
34,684
17.576
Redevelopment
70,020
85,098(31,257)
1,449,767
41,292
138,697
48,091
35
21,780
156,883
3,395
398
5,000
6,796
789
3,473
5,120
295,753
686,210
211.441 3,481
138,697
48,091
35
1,000 - - _ _ _
22,780
- - - - - - - 1,468 400 400 400 400 - 159,951
_ _ _ _ _ _ _ _ 3.395
30 30 30 30 30 30 30 30 224 - - - - - 862
5,000
6.796
789
3.473
5,120
295,753
- - 180,209 - - - - _ _ _
80,209
- - - - - 1,963 - - 29,294 - - - - (31.257) -
- - 63,018 - 63.018
30 30 181,239 30 30 1.993 30 63.048 30.986 400 400 400 400 t31.257) 933,969
29,294 37,719 (30) 88,402 55,800 34,654 15,583 (30) 6.972 34,112 (400) (400) (400) (400)
515,798 41.292
3,950
-
-
-
3,950
215.391
3,481
-
29.294
37,719
(30)
88,402
55,800
34,654
15.583
(30)
6,972
34,112
(400)
("a)
(400)
(400) -
519,748
41.292
5,014,657
1,244,165
(45,363)
749,001
-
104,172
430.884
-
-
-
77,370
6,506
(731,286)
-
(127,246)
-
- 163,200
6.886,060
898,209
$ 5.230,048
$ 1.247.64fi
$ (45,363)
$ 778,295
$ 37.719
$ 104,142
5 519,286
; 55,800
$ 34,fi54
$ 15,583
$ 77,340
$ 13,4]8
$ (697,1]4)
$ 400
$ (127,fid6)
$ (400)
b 400) 7 163,200
-$-7 405-808
$ 939,501
12811013
1WIM23
12/108015
12/318023
IMHM26
12/31/2029
f213f8029
12140022
f2r3f8pd5
128f8030
12/31!1050
12/31/2050
12131/1050
12/31/2032
Redevelopmenr
Housing
Redevelopment
Housing 6
Housing
Housing
Housing
Redevelopment
Housing
Economic
Housing
Housing
Redevelopment
Economic
Redevelopment
NM opment
Oevebprnenl
-PI'VO VV%1k
in grants from the State. The Redeveloper agrees to list all job vacancies in the Redeveloper's personnel
complement with MinnesotaWorks.net at www.minnesotaworks.net.
(g) Without limiting its obligations under Section 8.3 hereof, Block 52 LLC, Buchholz
LLC and Norgren LLC agree, jointly and severally, to indemnify, defend, and hold harmless the
Indemnified Parties from any claims or causes of action, including attorney's fees incurred by the
Indemnified Parties, arising from the performance of the DEED Grant Agreement by the
Redeveloper, or its officers, agents or employees. Block 52 LLC, Buchholz LLC and Norgren LLC
will, jointly and severally, further indemnify, defend, and hold harmless the Indemnified Parties
from any claims or causes of action, including attorney's fees incurred by the Indemnified
Parties, arising from the performance of or any obligations under the DEED Grant Agreement,
including without limitation any obligation to pay or repay any amounts to DEED. Block 52
LLC, Buchholz LLC and Norgren LLC further covenant and agree, jointly and severally, to repay
the DEED Grant to DEED, should the Authority be required to repay the DEED Grant pursuant
Minnesota Statutes 116J.575, subdivision 4 or the DEED Grant Agreement. Block 52 LLC,
Buchholz LLC and/or Norgren LLC shall repay any amounts required under this paragraph (g)
upon 30 days of a written request from the Authority.
Section 3.11 Other Assistance, In addition to the reimbursement of a portion of
Redeveloper's Public Redevelopment Costs through issuance of the TIF Note and the reimbursement
of a portion of the Redeveloper's DEED Redevelopment Costs with the proceeds of the DEED Grant,
the Authority will reimburse a portion of the Redeveloper's redevelopment costs and additional
environmental investigation costs detailed in Schedule G (the "Authority Grant Costs") to be
undertaken on the Redevelopment Property, pursuant to and in conformity with the Authority's
Policy Statements for Management of Available Tax Increment Financing Funds, adopted by the
Authority on January 10, 2018, the 2022 Pooled TIF Allocation Plan, adopted on May 25, 2022 and
the TIF Act from pooled tax increment from Tax Increment Financing District Nos. 1-6, 1-20, 1-22
and 1-34. The grant shall be in the amount of $367,400 (the "Authority Grant") and shall be disbursed
to the Redeveloper upon the occurrence of the following:
(i) The Redeveloper having delivered to the Authority evidence of Authority Grant
Costs paid or incurred in at least the principal amount of the Note as well as one or more
certificates signed by the Redeveloper's duly authorized representative, containing the
following: (A) a statement that each cost identified in the certificate is a Authority Grant Cost
as defined in this Agreement and that no part of such cost has been included in any previous
certification; (B) reasonable evidence that each identified Authority Grant Cost has been paid or
incurred by or on behalf of the Redeveloper; and (C) a statement that, to the Redeveloper's
knowledge, no uncured Event of Default by the Redeveloper has occurred and is continuing
under this Agreement; the Authority may, if not satisfied that the conditions described herein
have been met, return any certificate with a statement of the reasons why it is not acceptable and
requesting such further documentation or clarification as the Authority may reasonably require;
and
(ii) The Redeveloper having received from the Authority the Certificate of
Completion for the Minimum Improvements; and
21
MN190\159\822825.v2
(iii) The Authority has received evidence that the projects for which the Authority
Grant are being provided have been constructed and accepted by the City and the Authority has
confirmed that the Redeveloper is in compliance with Planning Development Contract,
including but not limited to the provisions therein relating to the projects consisting of the
Authority Grant Costs.
The Redeveloper shall be responsible for all Authority Grant Costs in excess of $367,400.
Section 3.12 Business Subsidy Act.
(a) Public Purpose. In order to satisfy the provisions of the Business Subsidy Act, the
Redeveloper acknowledges and agrees that the amount of the "Business Subsidy" granted to the
Redeveloper under this Agreement is the Land Write Down, the TIF Note, the DEED Grant, and the
Authority Grant, and that the Business Subsidy is needed because the construction of the Minimum
Improvements is not sufficiently feasible for the Redeveloper to undertake without the Business
Subsidy due to the extraordinary costs of land acquisition, demolition, hazardous material
remediation, and site improvements necessary to construct the Minimum Improvements on the
proposed site. The public purpose of the Business Subsidy is to redevelop land in the City's
downtown which is underutilized or characterized by blight, increase the tax base of the City and the
State, increase jobs in the City and State (including construction jobs), and help provide a range of
housing options in the City.
(b) Operation of Site. The Redeveloper must continue operation of the Minimum
Improvements as a mixed-use development (the "Qualified Facility") for at least 5 years after the
Benefit Date (defined hereinafter), subject to the continuing obligation described in Section 10.3 of
this Agreement. The improvements will be a Qualified Facility as long as the Minimum
Improvements is operated by the Redeveloper for the aforementioned qualified uses. During any
period when the Minimum Improvements is vacant and not operated for the aforementioned qualified
uses, the Minimum Improvements will not constitute a Qualified Facility.
(c) Job and Wage Goals. The "Benefit Date" of the assistance provided in this
Agreement is the earlier of the date of issuance of the Certificate of Completion or the date the
Minimum Improvements is occupied by Redeveloper. By or before the "Compliance Date", defined
as the date two years after the Benefit Date, the Redeveloper shall cause to be created at least 45 full-
time jobs permanent to the Redevelopment Property. The Redeveloper shall cause the hourly wage
of the new jobs to be at least $12.39 per hour, with benefits equal to at least $1.75 per hour.
Notwithstanding anything to the contrary herein, if the wage and job goals described in this paragraph
are met by the Compliance Date, those goals are deemed satisfied despite the Redeveloper's
continuing obligations under Sections 3.12(b). The Authority may, after 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 regarding this matter.
(d) Remedies. If the Redeveloper fails to meet the goals described in Section 3.12(b) and
3.12(c), the Redeveloper shall repay to the Authority upon written demand from the Authority a "pro
rata share" of the outstanding principal amount of the TIF Note and the Authority Grant together with
interest on that amount at the implicit price deflator as provided in Section 116J.994, subd. 6 of the
Business Subsidy Act, accrued from the date of substantial completion of the Minimum
22
MN 190\159\822825.v2
SCHEDULE F
AUTHORITY GRANT COSTS
Estimated Costs for the Authority Grant Items are shown below.
The total Authority Grant is not to exceed (capped at) $367,400. The
Redeveloper shall be responsible for all costs in excess of $367,400.
Parking Paving
Parking Lot Excavation
Internal Sidewalk and Landscaping
Street Sidewalks
Plaza Concrete and Landscaping
ROW Landscape/Streetscape
Environmental Study — Phase II
F-1
MN190\159\822825.\,2
$80,000.00
$80,000.00
$80,000.00
$55,000.00
$55,000.00
$55,000.00
$15,400
$420,400
CITY OF
PHONE: 763-295-2711 FAx:763-295-4404
Monti eRo 505 Walnut Street I Suite 11 Monticello, MN 55362
City of Monticello
TEMPORARY
CERTIFICATE OF OCCUPANCY
Building Address: 101 BROADWAY W
PIN: 155010052090
Legal Description: ORIGINAL PLAT
Block 052 Lot 009
Zoning District:
Permit No:
2022-00744
Work Activity:
NEW CONSTRUCTION
Construction Type:
VB
Occupancy:
R-2, S-2
Occupant Load:
649
Fire Sprinkler:
Y
Owner Name:
BUCHHOLZ PROPERTIES
OwnerAddress:
3010 SHEYENNE RIVER WAY
City, State, Zip:
WEST FARGO, ND 58078-
n;/ 31 ca 0
V 4f
Ronald G Hackenmueller, Building Date
Official #130002915
Comments:
ITEMS TO BE COMPLETED AT FINAL BUILDING INSPECTION:
EXHIBIT "A"
• INSTALL DOWN SPOUTS PER REVISED PLANS.
• INSTALL ALL STAIRWAY BARRIERS TO GARAGE LEVEL PER PLAN.
• INSTALL ALL FIRE EXTINGUISHERS.
• ADJUST ALL DOORS: ALL DOOR ARE REQUIRED TO SELF CLOSE, LATCH
AND SEAL.
• SUBMIT REVISED PLANS FROM RHET ARCHTECT.
• COMPLETE ALL ITEMS FROM INSPECTIONS OF APARTMENT UNITS. (SEE
ATTACHMENTS)
• INSTALL ALL SIDING PER MANUFACTURE'S REQUIREMENTS.
• INSTALL ALL HANDRAILS AND GUARDRAILS PER CODE.
COMPLETE ALL ITEMS ON THE DEVELOPMENTS AGREEMENT
www.ci.monticel lo.mn.us
EDA Agenda: 4/10/2024
6A. Economic Development Manager's Report
Prepared by:
Meeting Date:
❑x Other Business
Economic Development Manager
4/10/2024
Reviewed by:
Approved by:
N/A
N/A
REFERENCE AND BACKGROUND
1. Building Permit Reports Qtr. 4 2023 and Qtr. 1. 2024 - See Exhibit A and B.
2. Prospect List Update - See Exhibit D.
It BUILDING PERMIT ACTIVITY AND VALUATION
2022 -4th
2023 -4th
PERMIT TYPE
Qtr
Valuation
YTD
Valuation
Qtr
Valuation
YTD
Valuation
Single Family
4
1,025,795
35
8,763,675
1
630,928
22
5,996,934
Multi -Family Townhome
91 units
Falls under commercial
value
10
1,000,000
22
2,200,000
Multi -Family Apartment
0
0
2
30,400,000
Comercial-Industrial New - Alteration - Addition
6
23,577,959
22
29,064,720
7
1,379,000
32
24,043,269
BUILDING PERMIT ACTIVITY AND VALUATION
2023- 1st
2024-1st
PERMIT TYPE
Qtr
Valuation
YTD
Valuation
Qtr
Single Family
2
$550,000.00
$550,000.00
$550,000.00
17
Multi-Family Townhomes
0
$0.00
$0.00
$0.00
12
Comercial-Industrial New - Remodel - Addition
4
$1,383,790.00
$1,383,790.00
$1,383,790.00
6
Valuation I YTD I Valuation
$4,433,995.081 171 $4,433,995.08
$1,200,000.001 121 $1,200,000.00
$327,200.001 61 $327,200.00
PROSPECT LIST
04/05/2024
Date of
Contact
Company Name
IL
Business Category
Project Description
Building -Facility
A
Retained lobs New lobs
Total Investment
Project Status
5/22/2018
2/16/2021
3/19/2021
2/28/2022
6/16/2021
10/28/2021Project
M
2/7/2022
4/28/2022
Karlsburger Foods
Project Cold
Project Orion
Project Emma II
Project UBAA
Stallion
L.
Project Shepherd
III
Project Cougar
Food Products Mfg.
Industrial -Warehouse -Di
stri
Warehouse-Distributi
on
Light Ind -Assembly
Child Care Services
Technology Service
Lt Assembly Distribution
Precision Machining -Mfg.
Facilty Expansion
New Construction
New Construction
New Construction
New Construction or Exist
New Construction
New Construction
New Construction
20,000 sq. ft. +/-
80,000 sq. ft.
832,500 sq. ft.
20,000 sq. ff.
5,000 sq. ft.
42,000 sq. ft.
75,000 sq. ft.
35,000 to 45,000 sq. ft.
42
0
0
0
0
10 to
20
21
500
4
14 to 19
40
75
38
$4,500,000
$12,000,000
$125,000,000
$1,350,000
$2,000,000
$3,600,000
$10,500,000
$4,700,000
On Hold
Concept Stage
Active Search
Active Search
Act Search
Active Search
Active Search
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
PROSPECT LIST 04/05/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained lobs New lobs Total Investment Project Status
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
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
$2,000,000
Active Search
PROSPECT LIST 04/05/2024
Date of
Contact
Company Name Business Category Project Description Building -Facility Retained lobs New lobs Total Investment Project Status
3/29/2024
Project ET -BB -12-9
Industrial
Relocate - Existing Bldg
12,000 sq. ft.
12
$1,150,000
Identified Site
Contacts: M
= 03 YTD =
15