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City Council Resolution 2024-65CITY OF MONTICELLO, MINNESOTA RESOLUTION 2024 - 65 RESOLUTION GRANTING A PROPERTY TAX ABATEMENT FOR CERTAIN PROPERTY IN THE CITY AND APPROVING A TAX ABATEMENT AGREEMENT WITH MONTICELLO HOSPITALITY GROUP, LLC BE IT RESOLVED by the City Council (the "City Council") of City of Monticello, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. Pursuant to Minnesota Statutes, Sections 469.1812 through 469.1815, as amended (the "Abatement Act"), the City has developed a tax abatement policy (the "Policy") pursuant to which the City shall provide tax abatement assistance to projects within the City that meet certain requirements. The Policy specifies that tax abatement assistance will be provided to projects from the City's share of property taxes on a property collected from the increased tax base generated by said 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. The Policy allows the City Council to deviate from the Policy for projects that exceed the objectives identified therein. 1.02. The City has reviewed a proposal to acquire, construct and equip an approximately 98-room hotel development with a 130-seat restaurant, an indoor pool, meeting space and related parking and amenities (the "Project") to be owned by Monticello Hospitality Group, LLC, a Minnesota limited liability company, or an entity affiliated with or related thereto (the "Developer"), to be located on certain property on Chelsea Road in the City legally described in Exhibit A attached hereto (the "Property"). 1.03. The City believes the Project will preserve and enhance the property tax base in the City and the State of Minnesota (the "State"), help create jobs in the City and the State and provide access to services for residents of the City. 1.04. The Developer has requested a property tax abatement on the Property in order to assist in financing a portion of the costs of the Project. The proposed term of the abatement will be up to 10 years in an amount not to exceed $378,515. In a deviation from the Policy, the proposed abatement will apply to the City's entire share of real estate taxes for the Property (the "Abatement"). 1.05. The City and the Developer have caused to be prepared a Tax Abatement Agreement (the "Agreement") setting forth the terms and conditions under which the City will provide tax abatement assistance for the Project, including compliance with job and wage goals as required by Minnesota Statutes, Sections 116J.993 to 116J.995, as amended (the "Business Subsidy Act"). 1.06. On the date hereof, the City Council conducted a duly noticed public hearing on the Abatement, at which the views of all interested persons were heard and considered. Section 2. Findings. 2.01. The recitals set forth above are incorporated into this resolution. 2.02. It is hereby found and determined that the benefits to the City from the Abatement will be at least equal to the costs to the City of the Abatement, because (a) based on representations of the Developer, the City believes that the development to be facilitated is not reasonably likely to occur absent the Abatement and (b) the long-term taxes collected from the Property after termination of the Abatement will exceed the amount of the Abatement provided to the Developer. 2.03. It is hereby found and determined that the Abatement is in the public interest because it is expected to result in the following public benefits: (a) The Abatement will increase the City's tax base through the creation of an estimated $10,200,000 increase in market value for the Property; and (b) It will provide additional employment opportunities in the City and the State; and (c) It supports fulfillment of a demonstrated economic development need within the community; and (d) It supports development consistent with the Goals of The Pointes at Cedar Small Area Plan; and (e) It will provide access to services for residents of the City. Section 3. Actions Ratified; Abatement Approved. 3.01. The City Council hereby ratifies all actions of the City's staff and consultants in arranging for approval of this resolution in accordance with the Abatement Act. 3.02. Subject to the provisions of the Abatement Act and the execution of the Agreement as set forth in Section 4 hereof, the Abatement is hereby approved and adopted subject to the following terms and conditions: MC295\1\895647.v2 2 (a) The term "Abatement" means the City's share of annual real property taxes received by the City with respect to the Property in an amount calculated in each tax -payable year as follows: the City's tax rate for such tax -payable year multiplied by the net tax capacity of the Property as set forth in the Agreement. The City Council approves this deviation from the Policy. (b) The City will pay the Abatement in the amount, at the time, and in accordance with the terms and conditions set forth in the Agreement. (c) In accordance with Section 469.1813, subdivision 8 of the Abatement Act, in no year shall the Abatement, together with all other abatements approved by the City under the Abatement Act and paid in that year exceed the greater of 10% of the net tax capacity of the City for that year or $200,000 (the "Abatement Cap"). The City may grant other abatements permitted under the Abatement Act after the date of this resolution, provided that to the extent the total abatements in any year exceed the Abatement Cap, the allocation of Abatement Cap to such other abatements is subordinate to the Abatement granted pursuant to this resolution. (d) In no event shall the total payments of the Abatement to the Developer exceed $378,515 or continue to be paid for more than 10 years as set forth in the Agreement. (e) The Abatement is subject to modification in accordance with the Abatement Act, subject to the terms of the Agreement. (f) In accordance with Section 469.1815 of the Abatement Act, in each year during the term of the Abatement, the City will add to its levy the total estimated amount of current year Abatement granted under this resolution. (g) The City makes no warranties or representations regarding the amount or availability of the Abatement. Section 4. Agreement Approved. 4.01. The City believes that the development of the Project pursuant to the Agreement, and fulfillment generally of the Agreement, are in the vital and best interests of the City and the health, safety, morals, and welfare of its residents. Those public purposes of the Agreement include providing employment opportunities in the City and the State, preserving and enhancing the tax base in the City and the State, providing access to services for City residents, and encouraging additional desired development in the City. 4.02. The City hereby approves the Agreement, including the business subsidy agreement set forth therewith, substantially in accordance with the terms set forth in the form presented to the City Council, together with any related documents necessary in connection MC295\1\895647.v2 3 therewith, and without limitation all documents, exhibits, certifications or consents referenced in or attached to the Agreement (collectively, the "Development Documents") and hereby authorizes the Chair of the City Council and the City Administrator to negotiate the final terms thereof and, in their discretion and at such time as they may deem appropriate, to execute the Development Documents on behalf of the City, and to carry out, on behalf of the City, the City's obligations thereunder when all conditions precedent thereto have been satisfied. 4.03. The approval hereby given to the Development Documents includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the City. The execution of any instrument by the appropriate officers of the City herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. This Resolution shall not constitute an offer and the Development Documents shall not be effective until the date of execution thereof as provided herein. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the City Council by any duly designated acting official, or by such other officer or officers of the City Council as, in the opinion of the City Attorney, may act in their behalf. 4.04. Upon execution and delivery of the Development Documents, the officers and employees of the City are hereby authorized and directed to take or cause to be taken such actions as may be necessary on behalf of the City to implement the Development Documents. Section 5. Effective Date. This resolution is effective upon execution in full of the Agreement. Approved by the City Council of City of Monticello, Minnesota this 22nd day of July, 2024. r Mayor A EST: A,1A1 Ya6r Cit Cler MC295\1\895647.v2 4 EXHIBIT A LEGAL DESCRIPTION Lots 3 and 4, Block 1, DEEPHAVEN 3, according to the recorded plat thereof, Wright County, Minnesota. 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